Working Paper: NBER ID: w19529
Authors: Thomas Dee; James Wyckoff
Abstract: Teachers in the United States are compensated largely on the basis of fixed schedules that reward experience and credentials. However, there is a growing interest in whether performance-based incentives based on rigorous teacher evaluations can improve teacher retention and performance. The evidence available to date has been mixed at best. This study presents novel evidence on this topic based on IMPACT, the controversial teacher-evaluation system introduced in the District of Columbia Public Schools by then-Chancellor Michelle Rhee. IMPACT implemented uniquely high-powered incentives linked to multiple measures of teacher performance (i.e., several structured observational measures as well as test performance). We present regression-discontinuity (RD) estimates that compare the retention and performance outcomes among low-performing teachers whose ratings placed them near the threshold that implied a strong dismissal threat. We also compare outcomes among high-performing teachers whose rating placed them near a threshold that implied an unusually large financial incentive. Our RD results indicate that dismissal threats increased the voluntary attrition of low-performing teachers by 11 percentage points (i.e., more than 50 percent) and improved the performance of teachers who remained by 0.27 of a teacher-level standard deviation. We also find evidence that financial incentives further improved the performance of high-performing teachers (effect size = 0.24).
Keywords: teacher evaluation; performance incentives; teacher retention; education policy
JEL Codes: I20; J45
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Threat of dismissal (J63) | Voluntary attrition (J26) |
| Threat of dismissal (J63) | Behavior of low-performing teachers (I21) |
| Retention effects (C41) | Performance of teachers who remained (A29) |
| Financial incentives (M52) | Performance of high-performing teachers (D29) |
| Initial impact scores (F69) | Assignment of teachers to performance bands (A29) |
| Thresholds in impact evaluation system (C24) | Teacher retention and performance (M51) |