The Effect of Performance-Pay in Little Rock, Arkansas on Student Achievement

This paper examines evidence from a performance-pay program implemented in five Little Rock, Arkansas elementary schools between 2004 and 2007. Using a differences-in-differences approach, the evidence shows that students whose teachers were eligible for performance pay made substantially larger test score gains in math, reading, and language than students taught by untreated teachers. Further, these is a negative relationship between the average performance of a teacher’s students the year before treatment began and the additional gains made after treatment. That is, performance-pay in Little Rock appears to have improved student achievement and to have done so more for students of teachers who were previously less effective at producing learning gains.

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