Working Paper: NBER ID: w30687
Authors: Eric S. Taylor
Abstract: When employees expect evaluation and performance incentives will continue (or begin) in the future, the potential future rewards create an incentive to invest in relevant skills today. Because skills benefit job performance, the effects of evaluation can persist after the rewards end or even anticipate the start of rewards. I provide empirical evidence of these dynamics from a quasi-experiment in Tennessee schools. New performance measures improve teachers’ value-added contributions to student achievement. But improvements are twice as large when the teacher also expects future rewards linked to future scores. Value-added remains at the now higher level after performance incentives end.
Keywords: No keywords provided
JEL Codes: I21; J24; J45; M5
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| New evaluation measures introduced in 2012 (C52) | Teacher performance improvement (A29) |
| Anticipation of future incentives (D84) | Greater investments in skill development (J24) |
| Tenure incentives in fourth year of employment (M51) | Further performance increase (D29) |
| Skills developed during evaluation program (C52) | Elevated teacher performance after incentives end (D29) |
| Introduction of evaluation measures (C52) | Performance improvements compared to control groups (C92) |
| Anticipation of rewards linked to evaluation scores (D84) | Larger performance gains (D29) |
| Performance gains (D29) | Persistence of performance improvements after incentives end (J33) |
| Teachers who earned tenure (J45) | Higher performance levels compared to those who had tenure before the program (D29) |