1. Improving teaching and learning through effective incentives What Can We Learn from Education Reforms in Latin America? Emiliana Vegas and Ilana Umansky The World Bank

2. Motivation Teacher costs represent the largest share of educational expenditure Teachers play a key role in school quality and student learning Attracting and retaining qualified teachers, and motivating them to do the best work they can, is arguably the most important education challenge

3. Components of the study Theoretical and empirical review of literature on teacher incentives Empirical analysis/update of relative teacher salaries in 17 Latin American countries 7 case studies/evaluations of education reforms affecting teachers Qualitative case studies in Chile and Peru of the political economy of teacher incentive reforms

4. BrazilNora Gordon, U.C. San Diego, and Emiliana Vegas, World Bank ChileAlejandra Mizala and Pilar Romaguera, Universidad de Chile MexicoPatrick McEwan, Wellesley College, and Lucrecia Santibáñez, RAND Corporation BoliviaMiguel Urquiola, Universidad de Columbia, and Emiliana Vegas, World Bank El SalvadorYasuyuki Sawada and Andrew Ballard Ragatz, University of Tokyo HondurasEmanuela Di Gropello, World Bank, and Jeffrey H. Marshall, Sapere.org NicaraguaCaroline E. Parker, Harvard Graduate School of Education Analysis of Teacher Pay in Latin America Werner Hernani-Limarino, Universidad of Pennsylvania Literature ReviewIlana Umansky, World Bank Political EconomyLuis Crouch, World Bank Research team

5. Defining teaching quality What makes a teacher effective? In this study, we take the view that effective teachers are those whose students are learning, as measured by assessments of student achievement.

6. Two cases of performance- based teacher incentive reforms Chile ’ s Sistema Nacional de Evaluación de Desempeño de los Establecimientos Educacionales (SNED) Mexico ’ s Carrera Magisterial (CM)

7. Characteristics of teacher incentive programs: SNED in Chile Introduced in 1996 Group-based incentive, awarded to highest- performing schools serving 25 percent of enrollment in each region School performance is measured by student test scores, taking into account absolute scores and learning progress, as well as characteristics of the student population in each school 90% of the SNED bonus is divided among all teachers in the winning school It represents between 5 and 7% of an annual salary

8. Characteristics of teacher incentive programs: CM in Mexico Introduced in 1996 Group-based incentive, awarded to highest- performing schools serving 25 percent of enrollment in each region School performance is measured by student test scores, taking into account absolute scores and learning progress, as well as characteristics of the student population in each school 90% of the SNED bonus is divided among all teachers in the winning school It represents between 5 and 7% of an annual salary

9. Chile: Analysis of teacher pay Research questions Data usedMethodsInitial Results 1.What is the relative level & structure of teacher salaries? 2.What is the impact of incentives on teacher quality? 3.What is the impact of the SNED on student achievement? Household survey data ME administrative data National student assessment data (SIMCE) Own surveys of teacher and principals ’ perceptions of performance- based pay OLS regression GLS with school fixed effects Qualitative data analysis Teachers ’ average salaries rose 156% in 1990-2002 Compressed teacher salary structure; experience main determinant Quality of entrants into teacher education programs increased Some positive effects of SNED on student performance Strong support for performance-based pay among principals & teachers

10. Mexico: Carrera Magisterial Research question Data usedMethodsInitial Results Do the CM incentives induce teachers to improve their students ’ test scores? CM administrative data, including student, school and teacher variables Regression discontinuity Differences-in- differences No evidence that teachers improve their outcomes when they face stronger incentives

11. Teacher salary structure v. salary structure of other workers Experience or education Salary Teachers Other workers

12. Decomposition of teacher pay Sources: Cox (2003) and Urquiola and Vegas (2005)

13. Estimated impact on student achievement of SNED and CM Chile: SNED Preliminary evidence of a cumulative positive impact on the student achievement in schools with relatively high probabilities of winning the award. México: Carrera Magisterial No program impact on teaching quality. Teachers who face the greatest incentives (who would earn salary increases if their students have high test scores) do not tend to have students with higher achievement.

14. What factors may explain the relatively weak impact of performance-based pay teacher incentive programs? In CM, few teachers face a real possibility of winning The magnitude of the SNED bonus may be too small to merit the extra effort The incentive may only be weakly related to teaching quality and effort The political context and especially teachers unions play an important role in the design and implementation of teacher incentive reforms

15. Improving teaching and learning through effective incentives What Can We Learn from Education Reforms in Latin America? Emiliana Vegas and Ilana Umansky The World Bank