Incentives to Teachers and Students-Becker

The traditional public school system had a very weak incentive structure. Since students automatically went to neighborhood schools, schools did not have to compete for students. The teachers unions long ago eliminated merit pay, and made teachers’ pay determined almost entirely by degrees and years spent teaching. Finally, in this traditional system, students had little incentive to work hard, especially when they did not expect to get much education, and could count on always getting promoted.

All this is beginning to change for the better, despite fierce opposition from teachers unions to virtually every important reform. School vouchers, and especially the charter school movement, is bringing competition to the traditional neighborhood school. No longer can public schools automatically have a captive audience of all the school age children in their neighborhood. Charter schools are expanding as rapidly as allowed by local and state restrictions that have been due mainly to lobbying of teachers unions.

Fortunately, restrictions on charter schools, and the even greater limits imposed on the scope of school vouchers, are breaking down, in large part because parents are becoming vocal, and are also voting with the feet of their children. In addition, careful evaluations of charter schools in randomized experiments that compare the performance on standardized tests of students in charter schools to performance by students in regular public schools generally show that charter school students do significantly better (see, for example, studies by Josh Angrist of MIT and co-authors of charter schools in and near Boston).

Some progress has also been made in finding ways to better motivate students, even in traditional public schools. A large and mainly well designed experiment of poor rural children in Mexico that began in the 1990s, originally called Progresa (now called Oportunidades), showed that even young children from uneducated families could be better motivated by financial incentives. Progresa gave monthly stipends to mothers of children in the program if they attended school regularly and did decently. School attendance did rise for families participating in this program, and students stayed in school longer.

Experiments are now ongoing in American public schools by my colleagues Steve Levitt and John List, along with Roland Fryer of Harvard, on motivating students by giving financial rewards directly to students rather than to parents. Although the studies are not yet completed, I would anticipate that students, especially older students, could be well motivated by monetary and other rewards for good performance.

Not surprisingly, teachers unions fight hardest against reforms that change the way teachers are paid, especially when they introduce incentives for teachers to perform more effectively. Teachers’ pay should tend to depend on education and experience, but it should also be sensitive to their revealed effectiveness as teachers. Teachers unions have for many decades fought merit pay that allows principals and other administrators to determine “merit” by their evaluations of how well teachers perform. The unions have claimed that this approach to merit would give higher pay not to teachers who do the best teaching, but to teachers who ingratiate themselves into the good graces of the administrators. Perhaps that argument has some merit in the traditional school system where administrators of neighborhood schools have some monopoly power, but it is far less compelling as administrators of public schools increasingly have to compete for students by offering better education.

In any case, the call now is for merit pay based on more objective criteria, such as students’ performance on standardized tests. Since students differ greatly in how well prepared they are for particular classes and subject matter, it is crucial to design a merit pay system that ties pay not to the absolute level of performance, but to the increment in performance added by different teachers. It may also be desirable to try to reduce “teaching to the test”, whereby teachers only emphasize materials that are included in the tests used to determine merit pay, although teaching to the test is valuable if doing well on the “test” requires knowledge of the important principles.

I do not want to minimize the difficulty of getting a well-designed system of merit pay, and Posner discusses many such difficulties. However, my colleague, Derek Neal, has proposed an attractive system of merit pay, where student performance at the end of the year is compared to that of students who perform about as well at the beginning of the year. Essentially, teachers then get a bonus that depends on the percentile ranking of their students at year-end compared with the performance of the comparable students. Other education specialists have different ways to determine merit pay that may be worth considering.

The disgraceful reaction of the LA teachers union to publication by the LA Times of the database that gives performance scores of the students of 6000 elementary school teachers is indicative of how teachers unions feel toward rewarding better teachers. The support by Arne Duncan, the US Secretary of Education, of the newspaper’s publication of this information is highly commendable. Not only should such information be published and publicized, but they should also be used to design a system where merit plays a sizable part in the monetary compensation of teachers.

Comments

[blake]

Yay! Letting kids take 1/2 of the money the school is given for their education as a voucher if they go to a different school would be my call. But school reform is so needed now imo. Glad to hear you guys are on it.

[Jake]

It's amazing. To identify effective educational reforms, all one need do is target the proposals the teachers' unions oppose.

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[Bill Ivey]

Odd. All the research I know suggests that external rewards and punishments undercut internal motivation, at least for higher-order thinking tasks. They are, on the other hand, effective for lower-level thinking tasks such as rote memorization. I would argue we want to promote higher-level thinking in our schools.

In addition, my understanding is that research also shows that value-added measurements are not up to the task of discerning highly effective from ineffective teachers - that teachers' scores (or more precisely the scores of teachers' students) can vary wildly from year to year, and even after averaging together results for a decade there is only 92% reliability.

I certainly agree we should not be teaching to the test, and find other areas of agreement with your article as well. But (as a non-union teacher, not that it should matter) I did want to introduce this research into the discussion.

[m hoffmn]

This article is just plain DUMB and adds nothing to the resolution of a very difficult equation. It is just the usual teacher bashing. I attended public schools. I was poor. I attended college and advanced to receive a professional degree. None of my teachers were Rhodes scholars, but the Board of Education and politicians left them alone to teach. They provided the students every opportunity to learn. In retrospect, they were underpaid, and as I grew older I realized that their pensions were meager. Fortunately, teachers now are paid more appropriately in recognition of their critical position in society. This raises an interesting issue: Does bashing teachers actually destroy their motivation? Do any of these "experts" such as Arne Duncan have any real experience, education or training for their positions? I have great respect for those who enter the teaching profession. Most are initially well motivated. If you want to conduct a real world experiment to determine whether the so called "best" teachers can dramatically change the outcomes for marginal students, we should identify such supposedly superior teachers and place them in the schools with the lowest achieving students. For example, take teachers with six figure salaries from the wealth northwest suburbs of Chicago and place them in the intercity schools of Chicago with the lowest achieving students. Then we would actually have results. Until someone does so, without culling the best students from public schools and having them attend charter or private schools, we will never know. And, what about the special education students? Where do they go? Do we have special charter schools for them too? A huge part of public education budgets go toward serving these students. How many attend private schools? How many are in charter schools? Leave these issues to those who have studied them. For economics professors in their Ivy League towers to chime in accomplishes nothing. Richard Posner is right to admit that he is "unclear" with regard to these matters. Neither article adds anything to a very difficult subject. As Mr. Posner notes, good students from good social backgrounds achieve higher scores. This much is clear. As for other students, there is not nor has there been during my 62 years of life any clear answer.

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teachers then get a bonus that depends on the percentile ranking of their students at year-end compared with the performance of the comparable students.
I agree with this definetly

[Sarah Kevin]

Hi,
Since I am working as Assistant Professor, I believe teachers should get bonus or get an applause at least.
To motivate them for adopting better teaching techniques, the administration should arrange seminars, conferences or workshops, even some specialized courses should be arranged.
Thanks
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[student aid]

The unions have claimed that this approach to merit would give higher pay not to teachers who do the best teaching, but to teachers. I attended public schools. I was poor. I attended college and advanced to receive a professional degree. None of my teachers were Rhodes scholars, but the Board of Education and politicians left them alone to teach. They provided the students every opportunity to learn. In retrospect, they were underpaid, and as I grew older I realized that their pensions were meager. Fortunately, teachers now are paid more appropriately in recognition of their critical position in society. This raises an interesting issue: Does bashing teachers actually destroy their motivation? Do any of these "experts" such as Arne Duncan have any real experience, education or training for their positions? I have great respect for those who enter the teaching profession. Most are initially well motivated.

[Wack Mack]

Much of the debate on merit pay has been focused on designing test scores and basing pay of of those scores. Has anybody ever considered giving school boards more incentive to motivate teachers and students?
I question whether the increase in test scores attributed to charter schools and voucher programs is worth the money, time, and parental confusion that will be needed to implement and maintain such a program.

[Charles St]

If I may make a practical suggestion: Devil take the hindmost. Let say 3% per year be subject to firing, criteria to be negotiated between the union and the employer. Surely, a union can't object to its worst 3% being liable to firing, or to put it the other way, can't justify forcing the employer to retain the worst 3% of their employees.

Since nobody will want to be in the lowest 3%, this will create incentive to a certain minimum performance, an incentive that will increase with time, as the very worst are progressively culled.

(I already posted this at over at Marginal Revolution.)

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[MRWED]

I should say the post is not debatable and truly great! Teachers should be given real attention and one way to give this is through incentives/bonuses. It will help them to strive more and upgrade learning to be more productive and competent.

[Merchant]

I think the bonus depends on the student's teacher, is a good proposal, contrary to outstanding students also should get the school's bonus

[Merchant]

I think the bonus depends on the student's teacher, is a good proposal, contrary to outstanding students also should get the school's bonus

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