NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Design of Performance Pay in Education

Derek Neal

NBER Working Paper No. 16710
Issued in January 2011
NBER Program(s):   ED   LS

This chapter analyzes the design of incentive schemes in education while reviewing empirical studies that evaluate performance pay programs for educators. Several themes emerge. First, it is difficult to use one assessment system to create both educator performance metrics and measures of student achievement. To mitigate incentives for coaching, incentive systems should employ assessments that vary in both format and item content. Separate no-stakes assessments provide more reliable information about student achievement because they create no incentives for educators to take hidden actions that contaminate student test scores. Second, relative performance schemes are rare in education even though they are more difficult to manipulate than systems built around psychometric or subjective performance standards. Third, assessment-based incentive schemes are mechanisms that complement rather than substitute for systems that promote parental choice, e.g. vouchers and charter schools.

download in pdf format
   (514 K)

email paper

This paper is available as PDF (514 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w16710

Published: "The Design of Performance Pay in Education," Handbook of Economics of Education. Volume 4. 2011

Users who downloaded this paper also downloaded these:
Fryer, Levitt, List, and Sadoff w18237 Enhancing the Efficacy of Teacher Incentives through Loss Aversion: A Field Experiment
Barlevy and Neal w17194 Pay for Percentile
Lochner w16722 Non-Production Benefits of Education: Crime, Health, and Good Citizenship
Fryer w16850 Teacher Incentives and Student Achievement: Evidence from New York City Public Schools
Lavy w10622 Performance Pay and Teachers' Effort, Productivity and Grading Ethics
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us