Evaluating the Impact of Performance-related Pay for Teachers in England

Abstract

This paper evaluates the impact of a performance-related pay scheme for teachers in England. Using teacher level data, matched with 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-in-difference methodology. We find that the scheme did improve test scores and value added, on average by about half a grade per pupil. We also find heterogeneity across subjects, with maths teachers showing no improvement.