An econometric analysis of merit pay for teachers

This dissertation addresses the issue of whether merit pay for public school teachers improves student cognitive learning. Merit pay can potentially accomplish this in two ways: it can attract teachers with high quality observable qualifications to the school district; and perhaps more Importantly it can encourage all teachers in the district to work harder in the classroom. The dissertation shows how increases in unobservable teacher classroom effort attributable to the chance of receiving merit pay can be accounted for, thus permitting the full assessment of any benefits of merit pay for teachers.

The results indicate that the effect of merit pay on student learning in the sample district is negative and small. This implies that teacher classroom extra effort is less in the short run because merit pay is offered in the school district. Such a decrease can occur if teachers expect the total value of the merit award including nonmonetary elements to be negative. Thus, the results are consistent with the view that in a school district with merit pay teacher dissatisfaction with the evaluation process, jealousy, peer uncooperativeness, and the like are sufficient to exceed teacher benefits from those awards.

The results also show that in the district with merit pay increases in extra effort in teaching reading were more likely to be rewarded by merit pay than increases in extra effort applied to teaching math. This finding, coupled with our finding that teacher value of leisure is slightly more effort elastic in math than in reading, suggests that if teachers in the sample district decrease classroom extra effort in response to the chance to win merit pay, they can be expected to decrease extra effort in math more than they decrease extra effort in reading. I would like to thank my advisors, Roger Sherman and Jim Berkovec, without whose assistance this dissertation may have been done earlier but would not have been as complete, convincing, or interesting. I would also like to thank Martha Crow for her patient typing of my illegible tables. This dissertation is dedicated with love to my husband, Len. He inspires me with possibilities and insights, and never doubts my abilities. Without his support, I could not have completed this project.

Note: Abstract extracted from PDF file via OCR.

Digitization of this thesis was made possible by a generous grant from the Jefferson Trust, 2015.

Thesis originally deposited on 2016-03-14 in version 1.28 of Libra. This thesis was migrated to Libra2 on 2017-03-23 16:34:46.