A growing body of evidence suggests that teacher performance pay systems can improve student learning outcomes, particularly in settings where existing mechanisms for teacher accountability are weak. We use a field experiment in Tanzanian public primary schools to directly compare the effectiveness on early grade learning of 2 randomly assigned teacher performance pay systems: a pay for percentile system, which is more complex, but can (under certain conditions) induce optimal effort among teachers and a simple system that rewards teachers based on student proficiency levels.
We find that both systems improve student test scores. However, despite the theoretical advantages of the pay for percentile system, the proficiency system is at least as effective in raising student learning. Moreover, we find suggestive evidence that the pay for percentile system favors students from the top of the distribution, highlighting the challenge of designing incentives that can deliver optimal and equitable learning gains for all students.
This work is part of the Department for International Development’s ‘Research on Improving Systems of Education’ (RISE) Programme
Mbiti, I.; Romero, M.; Schipper, Y. (2018). Left Behind by Optimal Design: The Challenge of Designing Effective Teacher Performance Pay