Abhi Sivasailam
From USA Today, "Merit pay study: Teacher bonuses don't raise student test scores":
Offering middle-school math teachers bonuses up to $15,000 did not produce gains in student test scores, Vanderbilt University researchers reported Tuesday in what they said was the first scientifically rigorous test of merit pay.

Some 296 middle-school math teachers — two-thirds of the district's middle-school math teachers — volunteered to participate in the experiment. Half were placed randomly in a control group, while the rest were eligible for bonuses of $5,000, $10,000 or $15,000 if their pupils scored significantly higher than expected on the statewide exam known as the Tennessee Comprehensive Assessment Program.

Except for some temporary gains for fifth-graders, though, their students progressed no faster than those in classes taught by the 146 other teachers.

The PDF for the study is available online.

As a merit pay advocate, I'd love to disparage these results as the product of some unsound methodology, but I can't, in good faith, do that. This seems like a relatively clean experiment. Yet merit pay supporters need not abandon their cause. The study provides good answers, but the questions may be too narrow to be fully relevant. For example, in evaluating the responsiveness of teachers to potential performance bonuses, the study approximates what a labor economist would call elasticity of effort but not elasticity of labor supply. Put differently, the study suggests that the performance of existing teachers may not change in the presence of performance incentives but the study does not consider the dynamic changes in the overall teaching pool that may result from implementation of merit pay programs. More research must be conducted to evaluate whether merit pay attracts a better pool of educators who, in turn, have positive impacts on student performance.

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Abhi Sivasailam