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Effects of Individual Incentive Reforms in the Public Sector: The Case of Teachers

Author

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  • Martins, Pedro S.
  • Ferreira, João R.
Abstract
We evaluate a political reform in Portugal that introduced individual teacher performancerelated pay and tournaments in public schools. We find that the focus on individual performance decreased student achievement, as measured in national exams, and increased grade inflation. The results follow from a difference-in-differences analysis of matched student-school panels and two complementary control groups: public schools in regions that were exposed to lighter reforms; and private schools, whose teachers had their incentives unchanged. Students in public schools with a higher proportion of teachers exposed to the tournament also perform worse. Overall, our results highlight the potential social costs from disruption of cooperation amongst public sector workers due to competition for promotions.

Suggested Citation

  • Martins, Pedro S. & Ferreira, João R., 2024. "Effects of Individual Incentive Reforms in the Public Sector: The Case of Teachers," GLO Discussion Paper Series 1441, Global Labor Organization (GLO).
    • Handle: RePEc:zbw:glodps:1441
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    References listed on IDEAS

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    More about this item

    Keywords

    Tournaments; Public Sector; Teacher Merit Pay; Matched School-Student Data;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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