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The Performance of Performance Standards

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  • James Heckman
  • Carolyn Heinrich
  • Jeffrey Smith

Abstract

This paper examines the performance of the JTPA performance system, a widely emulated model for inducing efficiency in government organizations. We present a model of how performance incentives may distort bureaucratic decisions. We define cream skimming within the model. Two major empirical findings are (a) that the short run measures used to monitor performance are weakly, and sometimes perversely, related to long run impacts and (b) that the efficiency gains or losses from cream skimming are small. We find evidence that centers respond to performance standards.

Suggested Citation

  • James Heckman & Carolyn Heinrich & Jeffrey Smith, 2002. "The Performance of Performance Standards," NBER Working Papers 9002, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:9002
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    References listed on IDEAS

    as
    1. Cragg, Michael, 1997. "Performance Incentives in the Public Sector: Evidence from the Job Training Partnership Act," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 13(1), pages 147-168, April.
    2. James J. Heckman & Jeffrey Smith & Nancy Clements, 1997. "Making The Most Out Of Programme Evaluations and Social Experiments: Accounting For Heterogeneity in Programme Impacts," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(4), pages 487-535.
    3. James J. Heckman & Jeffrey A. Smith, 2004. "The Determinants of Participation in a Social Program: Evidence from a Prototypical Job Training Program," Journal of Labor Economics, University of Chicago Press, vol. 22(2), pages 243-298, April.
    4. James J. Heckman, 1991. "Randomization and Social Policy Evaluation Revisited," NBER Technical Working Papers 0107, National Bureau of Economic Research, Inc.
    5. repec:mpr:mprres:2950 is not listed on IDEAS
    6. James Heckman & Lance Lochner & Christopher Taber, 1998. "Explaining Rising Wage Inequality: Explanations With A Dynamic General Equilibrium Model of Labor Earnings With Heterogeneous Agents," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(1), pages 1-58, January.
    7. Kathryn H. Anderson & Richard V. Burkhauser & Jennie E. Raymond, 1993. "The Effect of Creaming on Placement Rates under the Job Training Partnership Act," ILR Review, Cornell University, ILR School, vol. 46(4), pages 613-624, July.
    8. James Heckman & Neil Hohmann & Jeffrey Smith & Michael Khoo, 2000. "Substitution and Dropout Bias in Social Experiments: A Study of an Influential Social Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(2), pages 651-694.
    9. James J. Heckman & Jeffrey A. Smith & Christopher Taber, 1996. "What Do Bureaucrats Do? The Effects of Performance Standards and Bureaucratic Preferences on Acceptance into the JTPA Program," NBER Working Papers 5535, National Bureau of Economic Research, Inc.
    10. Howard S. Bloom & Larry L. Orr & Stephen H. Bell & George Cave & Fred Doolittle & Winston Lin & Johannes M. Bos, 1997. "The Benefits and Costs of JTPA Title II-A Programs: Key Findings from the National Job Training Partnership Act Study," Journal of Human Resources, University of Wisconsin Press, vol. 32(3), pages 549-576.
    11. John Burghardt & Peter Z. Schochet, 2001. "National Job Corps Study: Impacts by Center Characteristics," Mathematica Policy Research Reports 79dc6705a88648e3881115389, Mathematica Policy Research.
    12. Hanushek, Eric A., 2002. "Publicly provided education," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 30, pages 2045-2141, Elsevier.
    13. James Heckman & Jeffrey Smith & Christopher Taber, 1998. "Accounting For Dropouts In Evaluations Of Social Programs," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 1-14, February.
    14. Avinash Dixit, 2002. "# Incentives and Organizations in the Public Sector: An Interpretative Review," Journal of Human Resources, University of Wisconsin Press, vol. 37(4), pages 696-727.
    15. Robert S. Gay & Michael E. Borus, 1980. "Validating Performance Indicators for Employment and Training Programs," Journal of Human Resources, University of Wisconsin Press, vol. 15(1), pages 29-48.
    Full references (including those not matched with items on IDEAS)

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    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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