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-in-difference methodology. We find that the scheme did improve test scores and value added increased on average by about 40% of a grade per pupil.
Atkinson, A., Burgess, S., Croxson, B., Gregg, P., Propper, C., Slater, H., & Wilson, D. (2009). Evaluating the impact of performance-related pay for teachers in England. Labour Economics, 16(3), 251-261. https://doi.org/10.1016/j.labeco.2008.10.003