Teacher Quality and Incentives: Theoretical and Empirical Effects of Standards on Teacher Quality

Schneider, Kerstin; Richter, Wolfram F.; Jürges, Hendrik

doi:10.2139/ssrn.613502

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Teacher Quality and Incentives: Theoretical and Empirical Effects of Standards on Teacher Quality

28 Pages Posted: 2 Nov 2004

See all articles by Kerstin Schneider

Kerstin Schneider

University of Dortmund; CESifo (Center for Economic Studies and Ifo Institute)

Wolfram F. Richter

TU Dortmund University; CESifo (Center for Economic Studies and Ifo Institute); Institute for the Study of Labor (IZA)

Hendrik Jürges

University of Mannheim - Mannheim Research Institute for the Economics of Aging (MEA); German Institute for Economic Research (DIW Berlin)

Date Written: October 2004

Abstract

Applying the theory of yardstick competition to the schooling system, we show that it is optimal to have central tests of student achievement and to engage in benchmarking because it raises the quality of teaching. This is true even if teachers' pay (defined in monetary terms) is not performance related. If teachers value reputation, and if teaching output is measured so that it becomes comparable, teachers will increase their effort. The theory is tested using the German PISA-E data. Our estimates suggest that, despite the flat career profile of German teachers, the quality of teaching tends to be higher in federal states with central exams.

Keywords: education, teacher quality, central examinations, yardstick competition, matching

JEL Classification: I28

Suggested Citation: Suggested Citation

Schneider, Kerstin and Richter, Wolfram F. and Jürges, Hendrik, Teacher Quality and Incentives: Theoretical and Empirical Effects of Standards on Teacher Quality (October 2004). Available at SSRN: https://ssrn.com/abstract=613502 or http://dx.doi.org/10.2139/ssrn.613502