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Pay by Design: Teacher Performance Pay Design and the Distribution of Student Achievement

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  • Prashant Loyalka
  • Sean Sylvia
  • Chengfang Liu
  • James Chu
  • Yaojiang Shi

Abstract

We present results of a randomized trial testing alternative approaches of mapping student achievement into rewards for teachers. Teachers in 216 schools in western China were assigned to performance pay schemes where teacher performance was assessed by one of three different methods. We find that teachers offered “pay-for-percentile” incentives outperform teachers offered simpler schemes based on class-average achievement or average gains over a school year. Moreover, pay-for-percentile incentives produced broad-based gains across students within classes. That teachers respond to relatively intricate features of incentive schemes highlights the importance of paying close attention to performance pay design.

Suggested Citation

  • Prashant Loyalka & Sean Sylvia & Chengfang Liu & James Chu & Yaojiang Shi, 2019. "Pay by Design: Teacher Performance Pay Design and the Distribution of Student Achievement," Journal of Labor Economics, University of Chicago Press, vol. 37(3), pages 621-662.
    • Handle: RePEc:ucp:jlabec:doi:10.1086/702625
    DOI: 10.1086/702625
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    Citations

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    Cited by:

    1. Barrera-Osorio, Felipe & Cilliers, Jacobus & Cloutier, Marie-Hélène & Filmer, Deon, 2022. "Heterogenous teacher effects of two incentive schemes: Evidence from a low-income country," Journal of Development Economics, Elsevier, vol. 156(C).
    2. Jian Zhang & Songqing Jin & Wei Si, 2020. "Incentivising teachers? Evaluating the incentive effect of China’s teacher performance‐based compensation reform in rural China," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(1), pages 171-188, January.
    3. Clare Leaver & Owen Ozier & Pieter Serneels & Andrew Zeitlin, 2021. "Recruitment, Effort, and Retention Effects of Performance Contracts for Civil Servants: Experimental Evidence from Rwandan Primary Schools," American Economic Review, American Economic Association, vol. 111(7), pages 2213-2246, July.
    4. Chang, Fang & Wang, Huan & Qu, Yaqiong & Zheng, Qiang & Loyalka, Prashant & Sylvia, Sean & Shi, Yaojiang & Dill, Sarah-Eve & Rozelle, Scott, 2020. "The impact of pay-for-percentile incentive on low-achieving students in rural China," Economics of Education Review, Elsevier, vol. 75(C).
    5. Berry, James & Kim, Hyuncheol Bryant & Son, Hyuk Harry, 2022. "When student incentives do not work: Evidence from a field experiment in Malawi," Journal of Development Economics, Elsevier, vol. 158(C).
    6. Daniel O. Gilligan & Naureen Karachiwalla & Ibrahim Kasirye & Adrienne M. Lucas & Derek Neal, 2022. "Educator Incentives and Educational Triage in Rural Primary Schools," Journal of Human Resources, University of Wisconsin Press, vol. 57(1), pages 79-111.
    7. Chengfang Liu & Ye Li & Shaoping Li & Renfu Luo & Linxiu Zhang & Scott Rozelle & Spencer Hagist & Jack Hou, 2020. "The returns to education in rural China: Some new estimates," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(1), pages 189-208, January.
    8. Derek Neal & Joseph Root, 2024. "The Provision of Information and Incentives in School Assignment Mechanisms," NBER Chapters, in: New Directions in Market Design, National Bureau of Economic Research, Inc.
    9. Samina Zamir & Zhencun Wang, 2023. "Uncovering Covid-19, distance learning, and educational inequality in rural areas of Pakistan and China: a situational analysis method," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-13, December.
    10. Tianli Feng & Xiyuan Jia & Lucy Pappas & Xiaojun Zheng & Teresa Shao & Letao Sun & Charlie Weisberg & Madeline Lu Li & Scott Rozelle & Yue Ma, 2022. "Academic Performance and the Link with Depressive Symptoms among Rural Han and Minority Chinese Adolescents," IJERPH, MDPI, vol. 19(10), pages 1-20, May.
    11. Berlinski, Samuel & Ramos, Alejandra, 2020. "Teacher mobility and merit pay: Evidence from a voluntary public award program," Journal of Public Economics, Elsevier, vol. 186(C).
    12. Englmaier, Florian & Grimm, Stefan & Grothe, Dominik & Schindler, David & Schudy, Simeon, 2024. "The effect of incentives in non-routine analytical team tasks," Other publications TiSEM 59dcd2ae-f55c-4f75-a225-f, Tilburg University, School of Economics and Management.
    13. Gupta, Shriyam & Liu, Chengfang & Li, Shaoping & Chang, Fang & Shi, Yaojiang, 2023. "Association between ability tracking and student’s academic and non-academic outcomes: Empirical evidence from junior high schools in rural China," International Journal of Educational Development, Elsevier, vol. 103(C).

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