F is for fewer bucks

By L.S. | LONDON

HOW do you improve education? To economists the answer is simple. Pay teachers for performance: if the pupils get good test results, give the teacher a bonus. Attempts to incentivise US teachers to bump up grades have generally proven ineffective, however. The solution, according to a recent research paper finds, is to hand teachers a large sum in advance and dock their pay if students flunk their exams. This gets results.

The authors of the paper divided Chicago teachers into two groups: a “loss” group and a “gain” group. They paid “loss” teachers a bonus of $4,000 at the start of term. If exam results were below average, they took away up to $4,000, depending on performance. If results were above average, teachers could earn an additional sum of up to $4,000. “Gain” teachers were simply paid a bonus of up to $8,000.