Teacher performance incentives have negative impact

A recently published study from the Journal of Labor Economics looked at performance incentives for teachers in the NYC school system. The results should cause corporate reformers to pause

Providing financial incentives for teachers to increase student performance is an increasingly popular education policy around the world. This paper describes a school-based randomized trial in over two-hundred New York City public schools designed to better understand the impact of teacher incentives on student achievement. I find no evidence that teacher incentives increase student performance, attendance, or graduation, nor do I find any evidence that the incentives change student or teacher behavior. If anything, teacher incentives may decrease student achievement, especially in larger schools. The paper concludes with a speculative discussion of theories that may explain these stark results.

As Margarita Pivovarova, Assistant Professor of Economics at Arizona State University notes

The estimates from the experiment imply that if a student attended a middle school with an incentive in place for three years, his/her math test scores would decline by 0.138 of a standard deviation and his/her reading score would drop by 0.09 of a standard deviation.

Not only that, but the incentive program had no effect on teachers’ absenteeism, retention in school or district, nor did it affect the teachers’ perception of the learning environment in a school. Literally, the estimated 75 million dollars invested and spent brought zero return!