Teacher Performance Pay: Experimental Evidence from India

Abstract

Performance pay for teachers is frequently suggested as a way of improving education outcomes in schools, but the theoretical predictions regarding its effectiveness are ambiguous and the empirical evidence to date is limited and mixed. We present results from a randomized evaluation of a teacher incentive program implemented across a large representative sample of government-run rural primary schools in the Indian state of Andhra Pradesh. The program provided bonus payments to teachers based on the average improvement of their students' test scores in independently administered learning assessments (with a mean bonus of 3% of annual pay). At the end of two years of the program, students in incentive schools performed significantly better than those in control schools by 0.28 and 0.16 standard deviations in math and language tests respectively. They scored significantly higher on "conceptual" as well as "mechanical" components of the tests, suggesting that the gains in test scores represented an actual increase in learning outcomes. Incentive schools also performed better on subjects for which there were no incentives, suggesting positive spillovers. Group and individual incentive schools performed equally well in the first year of the program, but the individual incentive schools outperformed in the second year. Incentive schools performed significantly better than other randomlychosen schools that received additional schooling inputs of a similar value.JEL Classification: C93, I21, M52, O15

Does computer-assisted learning improve learning outcomes? Evidence from a randomized experiment in migrant schools in Beijing

“…To eliminate confounding influences from school visits paid only to the treatment group during the CAL sessions, as Muralidharan and Sundararaman (2011) did in their RCT on teacher performance pay, every time our volunteers visited Source: Authors' survey. * * Significant at 5%.…”

How effective are financial incentives for teachers?

“…Nonetheless, two important experiments offer insights that suggest that incentives can be highly effective and far cheaper to implement in developing countries. A randomized controlled trial conducted in the state of Andhra Pradesh in India assigned teachers to one of three groups: no incentive; a school-wide incentive; or an individual incentive [11]. As a percentage of teacher salaries, the incentives were substantial, but in absolute terms they were inexpensive-typically less than US $100 per teacher.…”

Improving Education Outcomes in South Asia: Findings from a Decade of Impact Evaluations

“…It should be noted, however, that details on costs are only reported in 13 out of the 29 studies that form the basis of the systematic review. A list of these 13 studies and the reported costs associated with the interventions they document can be found in Table B. 2 Muralidharan and Sundararaman (2011) and Muralidharan (2012) group-based bonus payments to teachers based on improvement in students' test scores USD 2 per child per year Muralidharan and Sundararaman (2011) and Muralidharan (2012) individual-based bonus payments to teachers based on improvement in students' test scores USD 3 per child per year Muralidharan and Sundararaman (2013a) school choice program featuring lottery-based allocation of school vouchers savings of 102 USD per child per year Muralidharan and Sundararaman (2013b) extra contract teachers USD 6 per child per 24 months A first strand of research investigates the roles of interventions targeting individuals on the supplyside of the education sector, i.e. teachers.…”

“…There was no evidence that teacher bonus payments had any adverse consequences (like more of teachers' efforts being channeled towards incentivized subjects as opposed to non-incentivized ones such as science and social studies). In fact, incentive schools performed significantly better than those in a separate group of randomly chosen schools that had received additional schooling inputs of similar value (Muralidharan and Sundararaman, 2011;Muralidharan, 2012).…”

“…Others, in contrast, might only be shortterm fixes that quickly lose their impact. In a third group of interventions, important differences between seemingly equally effective treatment arms might only become apparent over the longer term -as was the case with the impacts on learning of group-and individual-based bonus payments to teachers in Andhra Pradesh, India (Muralidharan andMuralidharan 2012). All this means that the designers of impact evaluations should make every effort to capture interventions' effects over a period spanning at least two to four years.…”