Two interesting papers which I noted recently
First, Mike Jones looks at what really happens when we introduce performance pay in the teachers salary mix. He looks at a longitudinal study of US data. Whats the outcome?
Over the last decade many districts implemented performance pay incentives to reward teachers for improving student achievement. Economic theory suggests that these programs could alter teacher work effort, cooperation, and retention. Because teachers can choose to work in a performance pay district that has characteristics correlated with teacher behavior, I use the distance between a teacher’s undergraduate institution and the nearest performance pay district as an instrumental variable. Using data from the 2003 and 2007 waves of the Schools and Staffing Survey, I find that teachers respond to performance pay incentives by working fewer hours per week. Performance pay also decreases participation in unpaid cooperative school activities, while there is suggestive evidence that teacher turnover decreases. The treatment effects are heterogeneous; male teachers respond more positively than female teachers. In Florida, which restricts state performance pay funding to individual teachers, I find that work effort and teacher turnover increase.
So : if your going to introduce this, then it has to be at the individual level. That raises the question of course of how you measure individual teacher performance. In the USA its done almost totally by standardized tests. We are here trying to get away from these. The cognitive dissonance – of not wanting to go to the student and system pressure of measuring that which is needed for identification of individual teacher performance – will not stop people calling for less pressure on students and teacher merit pay. Folks, you cant have it both ways.
A second paper is Moltan and Altindag who look at how european parliamentarian work effort is related to pay levels.
Before July 2009, salaries of the Members of the European Parliament (MEPs) were paid by their home country, and there were substantial salary differences between MEPs representing different countries. Starting in July 2009, salaries are pegged to 38.5% of a European Court judge’s salary, paid by the European Union. This created an exogenous change in salaries, the magnitude and direction of which varied substantially. Using information on each MEP between 2004 and 2011, we show that an increase in salaries decreases attendance at plenary sessions and reduces the number of questions asked but it has no impact on other job-related activities.
the other job related activities include a wide variety of activities such as report involvement, rapporteur on a committee etc. They find that these other activities are not affected.
Michael D. Jones, Teacher behavior under performance pay incentives, Economics of Education Review, Volume 37, December 2013, Pages 148-164, ISSN 0272-7757, http://dx.doi.org/10.1016/j.econedurev.2013.09.005.
Mocan, N., Altindag, D.T.
Salaries and Work Effort: An Analysis of the European Union Parliamentarians
(2013) Economic Journal, . Article in Press.