Panel Paper: The Effects of Performance-Based Compensation: Evidence from the Ohio Teacher Incentive Fund (TIF)

Saturday, November 8, 2014 : 4:10 PM
Aztec (Convention Center)

*Names in bold indicate Presenter

Thomas Dee, Stanford University, Alexander Smith, Georgia Institute of Technology and James Wyckoff, University of Virginia
Abstract – High-quality teaching can make substantive contributions to the educational and economic success of students. However, teacher compensation is conventionally designed to reward credentials and experience that have not been linked to teacher effectiveness. The alleged shortcomings of this status quo have catalyzed new interest in creating “performance based compensation systems” (PBCS) that might both encourage teacher effectiveness and promote the recruitment and retention of high-quality teachers. Using an unprecedented amount of resources from the 2009 stimulus legislation, the U.S. Department of Education recently encouraged the implementation of the PCBS through Teacher Incentive Fund (TIF) awards. The districts that received these large competitive awards agreed to implement comprehensive PBCS with differential teacher pay based on student performance on standardized tests and evaluations from classroom observations.  Using teacher and school-level data for 23 TIF awardee districts in the state of Ohio, we provide early evidence on how these high-profile reforms have influenced both the teacher workforce (e.g., through retention decisions) and measures of school performance. Our research design seeks to identify the causal effects of TIF-funded reforms using panel-based econometric designs to compare level and slope changes in outcomes in TIF and non-TIF districts.