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ERIC Number: ED510494
Record Type: Non-Journal
Publication Date: 2009-Nov
Pages: 53
Abstractor: As Provided
Reference Count: 34
Optimal Incentives for Public Sector Workers: The Case of Teacher-Designed Incentive Pay in Texas. Working Paper 2009-05
Taylor, Lori L.; Springer, Matthew G.
National Center on Performance Incentives
Pay for performance is a popular public education reform, and millions of dollars are currently being targeted for pay for performance programs. These reforms are popular because economic and management theories suggest that well-designed incentive pay programs could improve teacher effectiveness. There is little evidence about the characteristics of a well-designed incentive pay plan for teachers, however. This study takes advantage of a recent natural experiment in Texas to explore the optimal design of teacher incentive plans. We find that when given the opportunity, teachers design relatively weak incentive pay plans. In turn, those relatively weak incentives do not appear to have induced any significant changes in teacher productivity, although they did have a significant impact on teacher turnover. As such, our evidence suggests that the types of incentives that appeal to teachers (and their unions) may not be optimal from the employer perspective. (Contains 7 tables, 2 figures and 20 footnotes.)
National Center on Performance Incentives. Peabody College of Vanderbilt University, PMB #43, 230 Appleton Place, Nashville, TN 37203. Tel: 615-322-5538; Fax: 615-322-6018; e-mail:; Web site:
Publication Type: Reports - Evaluative
Education Level: Elementary Secondary Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: Vanderbilt University, National Center on Performance Incentives
Identifiers - Location: Texas