Evaluating the impact of performance-related pay for teachers in England

This paper evaluates the impact of a performance-related pay scheme for teachers in England. Using data which matches individual pupils to individual teachers, and contains both test scores and value-added, we test whether the introduction of a payment scheme based on pupil attainment increased teacher effort. Our evaluation design controls for pupil effects, school effects and teacher effects, and adopts a difference-indifference methodology. We find that the scheme did improve test scores and value added increased on average by about 40% of a grade per pupil. (C) 2008 Elsevier B.V. All rights reserved.