Promotion Incentives in the Public Sector: Evidence from Chinese Schools
59 Pages Posted: 16 Dec 2016
Date Written: December 2016
We provide evidence that promotion incentives influence the effort of public employees by studying China's system of promotions for teachers. Predictions from a tournament model of promotion are tested using retrospective panel data on primary and middle school teachers. Consistent with theory, promotions are associated with wage increases, higher wage increases are associated with better performance, and teachers increase effort in years leading up to promotion eligibility but reduce effort if they are repeatedly passed over for promotion. Evaluation scores are positively associated with teacher time use and with student test scores, diminishing concerns that evaluations are manipulated.
Keywords: China, incentives, promotions, teachers
JEL Classification: J31, J33, J45, M51
Suggested Citation: Suggested Citation