Individual Teacher Incentives And Student Performance

This paper is the first to systematically document the relationship between individual teacher performance incentives and student achievement using United States data. We combine data from the National Education Longitudinal Survey with original survey data regarding the use of teacher incentives. We find that test scores are higher in schools offering individual financial incentives for good performance. Moreover, the relationship between the presence of merit pay and student test scores is strongest in schools that may have the least parental oversight. The association between teacher incentives and student performance could be due to better schools adopting teacher incentives or to teacher incentives eliciting more effort from teachers.