Working Paper: CEPR ID: DP6682
Authors: Esther Duflo; Rema Hanna; Stephen Ryan
Abstract: This paper combines a randomized experiment and a structural model to test whether monitoring and financial incentives can reduce teacher absence and increase learning. In 57 schools in India, randomly chosen out of 113, a teacher?s daily attendance was verified through photographs with time and date stamps, and his salary was made a non-linear function of his attendance. The teacher absence rate changed from 42 percent in the comparison schools to 21 percent in the treatment schools. To separate the effects of the monitoring and the financial incentives, we estimate a structural dynamic labour supply model that allows for heterogeneity in preferences and auto-correlation of external shocks. The teacher response was almost entirely due to the financial incentives. The estimated elasticity of labour with respect to the incentive is 0.306. Our model accurately predicts teacher attendance in two out-of-sample tests on the comparison group and a treatment group that received different financial incentives. The program improved child learning: test scores in the treatment schools were 0.17 standard deviations higher than in the comparison schools.
Keywords: education; financial incentives; India
JEL Codes: I20; I21; J13; J30; O10
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Teacher attendance (I21) | Teacher absenteeism (J22) |
| Teacher multitasking and intrinsic motivation (A29) | Student learning outcomes (A22) |
| Financial incentives (M52) | Teacher attendance (I21) |
| Monitoring and financial incentives (G18) | Teacher attendance (I21) |
| Teacher attendance (I21) | Student learning outcomes (A22) |
| Monitoring and financial incentives (G18) | Teacher absenteeism (J22) |