Making Teacher Incentives Work: Lessons from North Carolina's Teacher Bonus Program

Alicia Goldberg


Making Teacher Incentives Work coverThis brief from the American Enterprise
Institute offers a unique spin on today’s debate over performance-based bonuses
for teachers. The authors, both economists, use research pulled from North
Carolina’s ABC accountability program to advocate for school-level, as opposed
to individual, bonuses. (North Carolina’s program, which began in
1996-97, offers tiered bonuses to all faculty in schools that hit yearly growth
targets.) The authors argue that school-level programs ease the problems
associated with individual teacher incentives: competition for the best
students, the difficulties in rating teachers of non-tested subjects and grades,
and statistical noise inevitable with small student sample sizes. Going
further, they explain that the right benchmarks for bonus eligibility can
mitigate against any free-rider effects by motivating the best (who
individually don’t need to work harder for the bonus) and worst teachers (who
aren’t motivated by the promise of a reward that is too far out of reach). All
worth pondering, but the brief alone doesn’t make a convincing case that the
Tarheel program is working. For that, we’ll need to await the full paper, which is still under review. In the meantime,
technical background to the study is available here.

Thomas Ahn and Jacob
L. Vigdor, “Making Teacher Incentives Work: Lessons from North Carolina’s
Teacher Bonus Program
,” (Washington, D.C.: American Enterprise Institute
for Public Policy Research, June 2011).