Matt Springer | Jay P. Greene's Blog

Merit Pay Bust

September 22, 2010

For some time now I have expressed disillusionment with merit pay as an ed reform strategy. In a paper Stuart Buck and I produced last spring for a Harvard conference on performance incentives we wrote:

All of this leads us to measured skepticism about the merit of merit pay, unless coupled with other reforms such as competition between schools. After all, merit pay boils down to an attempt to recreate a market system within a tightly controlled state monopoly. This is an objective fraught with peril. Even if wise and benevolent state actors manage to get the incentives right at a particular moment in time in a particular place, their actions can always be undone by immediate successors. Those successors may well be more influenced by the powerful special interests that want to block merit pay, loosen the standards, or even to call a system “merit pay” while rewarding behavior that has no relation to actual achievement.

Now we have additional reasons for skepticism. A well-designed random-assignment experiment led by Vanderbilt’s Matt Springer found:

While the general trend in middle school mathematics performance was upward over the period of the project, students of teachers randomly assigned to the treatment group (eligible for bonuses) did not outperform students whose teachers were assigned to the control group (not eligible for bonuses).

Keep in mind that this experiment only tests whether financial incentives increase teacher motivation, resulting in higher student achievement. It does not address whether merit pay might change the composition of the teacher labor force, attracting and retaining more effective teachers.

Still, color me even more skeptical about the promise of merit pay as an ed reform strategy. It may well be that the current crop of teachers we have believe that they are doing their best, so offering them money for trying harder doesn’t result in a significant change in effort. And given the political and organizational barriers to merit pay, I hold out little hope that a well-designed program can be sustained long enough to effect the composition of the teacher labor market.

In the last week, I hope ed reformers have learned that we can’t really improve the school system by maintaining the same centralized system while trying to sneak a reformer into the control-room (a la Michelle Rhee). And I also hope we’ve learned that we can’t tinker with the incentives within that same centralized system ( a la merit pay). The key to effective reform is decentralization of control via school choice, including charters, vouchers, tax credits, weighted student funding, etc…

(edited for typos)