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American Economic Review: Vol. 102 No. 4 (June 2012)

AER Volume. 102, Issue 4 | Previous ArticleNext Article

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Incentives Work: Getting Teachers to Come to School

Article Citation

Duflo, Esther, Rema Hanna, and Stephen P. Ryan. 2012. "Incentives Work: Getting Teachers to Come to School." American Economic Review, 102(4): 1241-78.

DOI: 10.1257/aer.102.4.1241

Abstract

We use a randomized experiment and a structural model to test whether monitoring and financial incentives can reduce teacher absence and increase learning in India. In treatment schools, teachers' attendance was monitored daily using cameras, and their salaries were made a nonlinear function of attendance. Teacher absenteeism in the treatment group fell by 21 percentage points relative to the control group, and the children's test scores increased by 0.17 standard deviations. We estimate a structural dynamic labor supply model and find that teachers respond strongly to financial incentives. Our model is used to compute cost-minimizing compensation policies. (JEL I21, J31, J45, O15)

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Download Data Set (4.93 MB) | Online Appendix (213.98 KB)

Authors

Duflo, Esther (MIT)
Hanna, Rema (Harvard U)
Ryan, Stephen P. (MIT)

JEL Classifications

I21: Analysis of Education
J31: Wage Level and Structure; Wage Differentials
J45: Public Sector Labor Markets
O15: Economic Development: Human Resources; Human Development; Income Distribution; Migration