The Use of School­Wide Bonus Incentives on Educational Outcomes

In most public school systems, teacher pay is based solely on level of education and years of teaching experience. Unlike professionals in other fields where per­formance is a factor in determining com­pensation, teachers have little economic incentive to strive for results in their work. During the 2007­2008 academic year, the New York City Department of Education introduced a pilot program whereby teach­ers at high­needs schools would receive bonuses if their schools reached targeted educational outcomes, as measured by test scores and other factors. This pro­gram differs from other incentive pro­grams in that it rewards whole schools for raising overall student achievement, and not individual teachers for the progress that their particular students make. The Capstone team analyzed the impact of the program to determine what effect, if any, school­wide merit pay has on student per­formance and school quality.