Association for Public Policy Analysis & Management

Understanding how incentivizing teachers to increase their students' test score affects the way teachers behave is an important input to many education policy decisions. Exploiting a dramatic change in the way teachers in New York City were granted tenure, we provide evidence that incentivizing teacher value added leads to small but statistically significant increases in the teachers' value added scores. We similarly find improvements in students' grades, in both tested and untested subjects, and attendance rates during the year in which the student has the incentivized teacher. These increases, however, largely fade­out more rapidly than similar gains produced by non­incentivized teachers tend to persist at high rates. Focusing only on the first year, therefore, likely leads to mistaken conclusions about the impact of the policy.