Working Paper: NBER ID: w19915
Authors: Hugh Macartney
Abstract: This paper provides the first evidence that value-added education accountability schemes induce dynamic distortions. Extending earlier dynamic moral hazard models, I propose a new test for ratchet effects, showing that classroom inputs are distorted less when schools face a shorter horizon over which they can influence student performance. I then exploit grade span variation using rich educational data to credibly identify the extent of dynamic gaming, finding compelling evidence of ratchet effects based on a triple-differences approach. Further analysis indicates that these effects are driven primarily by effort distortions, with teacher reallocations playing a secondary role.
Keywords: educational accountability; ratchet effects; dynamic distortions; teacher effort; student performance
JEL Codes: D82; I21; J33; M52
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| value-added education accountability schemes (H52) | dynamic distortions (C69) |
| shorter horizon to influence student performance (D29) | distortions in classroom inputs decrease (D29) |
| shorter horizon to influence student performance (D29) | higher teacher effort (D29) |
| K-5 schools (I21) | higher teacher effort (D29) |
| dynamic distortions (C69) | measurable differences in student performance (D29) |
| effort reallocations (D61) | dynamic distortions (C69) |