A new working paper published by the National Bureau of Economic Research compares two approaches to incentivizing teacher performance and highlights the value of initiatives aimed at rewarding ability and effort.

Economists Hugh Macartney (Duke University), Robert McMillan (University of Toronto), and Uros Petronijevic (York University) examined two accountability regimes implemented in North Carolina—a 1996 statewide program followed by the state's implementation of No Child Left Behind a few years later. The state's program provided teachers with a bonus if average student scores on the state tests met the target set by the state. Then under NCLB, focus on a school's average test score was eliminated in favor of new metrics based on the number of students earning high enough scores to be considered "proficient" in math and reading.

Conceptually, NCLB cemented an important idea: that a school's success depends on the success of every individual student, rather than how a whole school might be doing "on average." In this spirit, schools were also required to show that specific student populations--including black students, Latinos, and students enrolled in special education--also made progress. But for researchers, NCLB offered another gift. Even just by chance, some teachers would be assigned more "marginal" students (who are just on the line of achieving proficiency) than others; these teachers, who would be best positioned to influence their school's proficiency rates, would experience the greatest pressure to meet NCLB benchmarks. Macartney, McMillan, and Petronijevic used the number of marginal students in a classroom as the measure of "incentive strength" a teacher experienced due to NCLB.

Increasing this "incentive strength," i.e., having more marginal students in a class, did make it more likely that a teacher would achieve a higher value-added score. In other words, teachers who were under the gun from NCLB rose to the occasion to meet the needs in their classrooms. But these results, which reflect an increase in teacher effort, paled in comparison to the results achieved by teachers who are just generally highly effective. This "ability" measure, which represents the change in student learning that occurs regardless of the incentive, had three times the impact on student achievement compared to the effort measure. Incentives like NCLB can only get you so far; to improve learning, the real power still lies with hiring and supporting great teachers.