Coauthors: Clare Leaver; Owen Ozier; Pieter Serneels.

Further details:

Although Rwanda has one of the highest rates of primary enrollment in sub-Saharan Africa, concerns around education quality persist. Researchers are exploring one route to recruiting and motivating skilled teachers: pay-for-performance contracts in public schools. Together with Innovations for Poverty Action and the International Growth Centre, researchers are conducting a randomized evaluation to assess whether performance-based contracts for teachers can improve students’ learning outcomes.

Policy Issue

Although access to education has greatly expanded across sub-Saharan Africa, improving education quality remains a challenge. Recruiting, motivating, and retaining skilled teachers is a step towards ensuring high-quality education. Pay-for-performance contracts, which reward teachers with bonuses for students’ high test scores, is one way that some school systems have tried to improve teachers’ performance, but evidence on the efficacy of performance pay contracts has been mixed.

In addition, at scale and over the long-term, performance pay teaching contracts may affect the composition of the teaching profession. Skilled teachers may be more willing to join the public sector under performance pay; less skilled individuals may be deterred from applying or may drop out. To date, there has been no rigorous evidence on how performance pay affects this selection into and out of the teaching profession.

This research will provide new evidence on both questions. Can linking teacher performance to student learning outcomes improve teachers’ performance, and in doing so, contribute to student learning gains? How effective are performance pay contracts at recruiting skilled and motivated teachers?

Context of the Evaluation

Rwanda is one of the top-performing countries in sub-Saharan Africa in terms of access to education. In 2015, net enrollment in primary education was at 97 percent. Yet, the U.K. Independent Commission for Aid Effectiveness (2012) found that the rapid expansion of primary education has led to a decline in educational outcomes. Recruiting and retaining qualified, skilled, and motivated teachers to improve education quality is a priority for Rwanda.

Several performance pay programs already exist in Rwanda’s public sector, and the government has expressed interest in reforming the incentive structure to make it more evidence-based. Under the imihigo system, public sector employees in other sectors receive financial rewards of up to five percent of their salary based on subjective performance evaluations. One evaluation found that a pay-for-performance program for primary health care clinics in Rwanda had substantial impacts on a range of health outcomes.1 In public schools, a substantial share of teachers’ existing salaries is made up of bonuses that are in theory discretionary and might be linked to performance. However, in practice, all teachers receive a fixed bonus amount.

Details of the Intervention

Researchers are working with Innovation for Poverty Action, the International Growth Centre, and the Rwanda Education Board to conduct a two-tiered randomized evaluation assessing whether performance-based contracts for teachers can improve students’ learning outcomes.

Tier 1: Giving existing teachers performance pay vs. fixed wages contracts.

Researchers will randomly assign 400 schools to either a pay-for-performance program, or a fixed wage program. In pay-for-performance schools, teachers whose students score within the top 20 percent of their district on the performance measure receive a merit bonus worth 15 percent of their base salary. Systematically rewards teachers whose pupils achieve strong learning outcomes, benchmarked against those in a cohort of comparable schools. In the fixed wage schools, teachers will receive an additional three percent salary (the expected value of the pay-for-performance contract) with certainty.

Researchers will compare student learning gains across teachers in pay-for-performance schools and fixed wage schools to understand the incentive effects of performance pay contracts. Do performance pay contracts motivate teachers more effectively than fixed wage contracts?

Tier 2: Recruiting teachers with performance pay vs. fixed wage contracts.

Researchers will randomly assign 600 teachers to receive initial contract offers from either performance pay or fixed wage schools.

Researchers will compare student learning gains across teachers who accepted an initial performance pay offer and those who accepted an initial fixed wage offer to understand the selection effects of performance pay contracts. This selection effect captures whether performance pay has any effects on who becomes a teacher (or enters the public sector). Do performance pay contracts attract more highly skilled or motivated teachers than fixed wage contracts?