The Texas Advanced Placement Incentive Program pays both students and teachers for passing grades on Advanced Placement (AP) exams. The program was implemented in schools serving primarily low-income, minority populations. Using a difference-in-differences strategy, I find that program adoption is associated with increased AP course enrollment and AP exam taking. Moreover, the program is associated with an increase in students scoring above 1100/24 on the SAT/ACT, and an increase in students matriculating in college. I find no evidence that the rewards distorted behaviors in undesirable ways. I present empirical evidence that teachers and students were not simply aiming to maximize their rewards. This is corroborated by anecdotal evidence that the increases in AP participation were due to better access to AP courses, changes in teacher and peer norms towards AP courses, and better student information. The per-student program costs are small relative to reasonable estimates of the lifetime benefits that may accrue to affected students such that the program may ameliorate sub-optimal educational investments.

I analyze the longer-run effects of a program that pays both 11th and 12th grade students and teachers for passing scores on Advanced Placement exams. Using a difference-in-differences strategy, I find that affected students attend college in greater numbers, are more likely to remain in college beyond their freshman year, and have improved college GPAs. Moreover, the program improves college outcomes even for those students who would have enrolled in college without the program. I also find evidence of increased college graduation for black and Hispanic students ─ groups that tend to underperform in college. This evidence suggests that relatively late high-school interventions may confer lasting positive and large effects on student achievement in college, and may be effective at improving the educational outcomes of minority students. The finding of enduring benefits when extrinsic motivators are no longer provided is important in light of concerns that incentive-based-interventions may lead to undesirable practices such as “teaching-to-the-test” and cheating.

We exploit arguably exogenous train schedule changes in Washington DC to investigate the relationship between public transportation provision, the risky decision to consume alcohol, and the criminal decision to engage in alcohol–impaired driving. Using a triple differences strategy, we provide evidence that both DUI arrests and alcohol related fatal traffic accidents fell, while alcohol related arrests increased, as a result of the expanded hours of Metro operation. However, we find that these effects may be due, in part, to individuals shifting their drinking to evenings when the Metro offered late night service from other evenings. Furthermore, we provide strong evidence that these effects were localized to areas close to Metro Stations and may reflect spatial shifting. Given evidence of both temporal and geographic shifting, the overall effects of public transportation provision on drinking and DUI behaviors on the entire DC area may be small.

This paper evaluates the first year of Harvard’s Financial Aid Initiative, which increased aid and recruiting for students from low income backgrounds. Using rich data from the Census and administrative sources, we estimate family incomes for the vast majority of plausible applicants from the U.S. We find that the Initiative had a significant effect almost entirely because it attracted a pool of applicants that was larger and slightly poorer. It appears that very similar standards of admission were used for this group as had been used in previous years. This group, once admitted, enrolled at a rate very similar to that of previous years. Thus, there are a greater number of low income students in the Class of 2009 than in the Class of 2008 simply because more well-qualified, low income students applied. Put another way, the initiative did not create a new form of affirmative action–rather, there was an untapped supply of able, low income students. Many apparently qualified students still do not apply, and a disproportionate share of these “missing applicants” come from high schools that have little or no tradition of sending applications to selective private colleges. Targeted outreach to such “one offs” – that is, students who are one of only a few qualified students from their school in recent years – may be a way for selective private colleges to increase their income diversity.

The reshuffling of students due to the end of student busing in Charlotte-Mecklenburg provides a unique opportunity to investigate the relationship between changes in student attributes and changes in teacher quality that are not confounded with changes in school or neighborhood characteristics. Comparisons of OLS and IV results suggest that the spatial correlation between teachers’ residences, students’ residences and schools could lead to spurious correlation between student attributes and teacher characteristics. The re-shuffling of students led to teacher resorting so that schools that experienced a repatriation of black students experienced a decrease in various measures of teacher quality (including estimated value-added). I provide evidence that this was primarily due to a labor supply response.

Using student examination data linked to longitudinal teacher personnel data, we document that a teacher’s students have larger test score gains when she experiences an improvement in the observable characteristics of her colleagues. Using within-school and within-teacher variation, we further show that a teacher’s students have larger test score gains when she has more effective colleagues (based on their own students’ achievement gains from an out-of-sample pre-period). A one standard deviation increase in average teacher peer quality is associated with an increase of 0.02 and 0.04 standard deviations in student test score growth in reading and math respectively (about one third of the own-teacher effect). These spillovers are strongest for less experienced teachers, persist over time and teachers perform best when they are the weakest of their peer group– suggesting a peer learning interpretation. Consistent with this interpretation, conditioning on historical peer quality reduces the explanatory power of individual teacher effects by twenty percent.

In Trinidad and Tobago students are assigned to secondary schools after fifth grade based on achievement tests, leading to large differences in the school environments to which students of differing initial levels of achievement are exposed. Using both a regression discontinuity design and rule-based instrumental variables to address self-selection bias, I find that being assigned to a school with higher-achieving peers has large positive effects on examination performance. These effects are about twice as large for girls than for boys. This suggests that ability-grouping reinforces achievement differences by assigning the weakest students to schools that provide the least value-added.

Using exogenous secondary school assignments to remove self-selection bias to schools and peers, I obtain credible estimates of (1) the effect of attending schools with higher-achieving peers, and (2) the direct effect of peer quality improvements within schools, on the same population. While students at schools with higher-achieving peers have better academic achievement, within-school increases in peer achievement improve outcomes only at high-achievement schools. Estimates suggest that peer quality can account for over half of school value-added among the top quartile of schools, but little value-added for other schools. The results reveal some large and important differences by gender.

In Trinidad and Tobago students are assigned to secondary schools after fifth grade based on achievement tests, leading to large differences in the school environments to which students of differing initial levels of achievement are exposed. This paper uses instrumental variables based on the discontinuities created by the assignment mechanism, and exploits rich data which include the students’ test scores at entry and secondary school preferences to address self-selection bias. I find that attending a better school has large positive effects on examination performance at the end of secondary school. The effects are about twice as large for girls than for boys.

I analyze changes in teacher turnover, hiring, effectiveness, and salaries at traditional public schools after the opening of a nearby charter school. While I find small effects on turnover overall, difficult to staff schools (low-income, high-minority share) hired fewer new teachers and experienced small declines in teacher quality. I also find evidence of a demand side response where schools increased teacher compensation to better retain quality teachers. The results are robust across a variety of alternate specifications to account for non-random charter entry.

I investigate the importance of the match between teachers and schools for student achievement. I show that teacher effectiveness increases after a move to a different school, and I estimate teacher-school match effects using a mixed-effects estimator. Match quality "explains away" a quarter of, and has two-thirds the explanatory power of teacher quality. Match quality is negatively correlated with turnover, unrelated with exit, and increases with experience. This paper provides the first estimates of worker-firm match quality using output data as opposed to inferring productivity from wages or employment durations. Because teacher wages are essentially unrelated to productivity, this is compelling evidence that workers may seek high-quality matches for reasons other than higher pay.

Existing studies on single-sex schooling suffer from biases because students who attend single-sex schools differ in unmeasured ways from those who do not. In Trinidad and Tobago students are assigned to secondary schools based on an algorithm allowing one to address self-selection bias and estimate the causal effect of attending a single-sex school versus a similar coeducational school. While students (particularly females) with strong expressed preferences for single-sex schools benefit, most students perform no better at single-sex schools. Girls at single-sex-schools take fewer sciences courses and more traditionally female subjects.

We investigate the role of social networks in aligning the incentives of agents in settings with incomplete contracts. We study the New York City taxi industry where taxis are often leased and lessee-drivers have worse driving outcomes than owner-drivers due to a moral hazard associated with incomplete contracts. We find that: (1) drivers leasing from members of their country-of-birth community exhibit significantly reduced effects of moral hazard; (2) network effects appear to operate via social sanctions; and (3) network benefits can help to explain the industry organization in terms of which drivers and owners form business relationships.

This article synthesizes the research literature on how to ensure that the teaching workforce is effective. It offers three approaches to improving effectiveness: attract talented individuals into the profession, create incentives for exerting optimal effort, and provide professional development so that teachers have the skills to be effective. The research literature reveals that each approach can yield meaningfully improved student outcomes and that no one strategy is clearly more effective. The policy implication of these findings is that a multifaceted approach would improve teacher effectiveness and student outcomes. However, although there are examples of successful policies, there is no consensus on the most effective practices. The paper concludes that schools need to be data driven, flexible in their employment practices, and open to experimentation.

Unlike in elementary school, high-school teacher effects may be confounded with both selection to tracks and unobserved track-level treatments. I document sizable confounding track effects, and show that traditional tests for the existence of teacher effects are likely biased. After accounting for these biases, high-school algebra and English teachers have much smaller test-score effects than found in previous studies. Moreover, unlike in elementary school, value-added estimates are weak predictors of teachers’ future performance. Results indicate that either (a) teachers are less influential in high school than in elementary school, or (b) test scores are a poor metric to measure teacher quality at the high-school level.

This paper presents an analysis of the longer-run effects of a college-preparatory program implemented in inner-city schools that provided teacher training in addition to payments to eleventh- and twelfth- grade students and their teachers for passing scores on Advanced Placement (AP) exams. Affected students passed more AP exams, were more likely to remain in college beyond their first and second years, and earned higher wages. Effects are particularly pronounced for Hispanic students who experienced a 2.5-percentage-point increase in college degree attainment and an 11-percent increase in earnings. While the study is based on non-experimental variation, the results are robust across a variety of specifications, and most plausible sources of bias are ruled out. The results provide credible evidence that implementing high-quality college-preparatory programs in existing urban schools can improve the long-run educational and labor market outcomes of disadvantaged youth.

This paper presents a model where students have cognitive and non-cognitive ability, and a teacher’s effect on long-run outcomes is a combination of her effects on both ability-types. Conditional on cognitive scores, an underlying non-cognitive factor associated with student absences, suspensions, grades, and grade progression, is strongly correlated with long-run educational attainment, arrests, and earnings in survey data. In administrative data, teachers have meaningful causal effects on both cognitive-scores and this non-cognitive factor. Calculations indicate that teacher effects based on test scores alone fail to identify many excellent teachers, and may greatly understate the importance of teachers for adult outcomes.

Moral hazard is endemic to employment relationships and firms often use performance pay and managerial control to address this problem. While performance pay has received much empirical attention, managerial control has not. We analyze data from a managerial-control field experiment in which an auto-repair firm provided detailed checklists to mechanics and monitored their use. Revenue was 20 percent higher under the experiment. We compare this effect to that of quasi-experimental increases in mechanic commission rates. The managerial-control effect is equivalent to that of a 10 percent commission increase. We find evidence of complementarities between the two, suggesting benefits from an all-of-the-above approach. We also find evidence of incentive gaming under performance pay.

The school finance reforms (SFRs) that began in the early 1970s and accelerated in the 1980s caused some of the most dramatic changes in the structure of K–12 education spending in U.S. history. We present an analysis of the effects of these reforms on the level and distribution of school district spending, as well as their impacts on subsequent educational and economic attainment outcomes. In Part One, using a newly compiled database of school finance reforms and a recently available long panel of annual school district data on per-pupil spending that spans the period 1962–2010, we present an event-study analysis of the effects of different types of school finance reforms on per-pupil spending in low- and high-income school districts. We find that SFRs have been instrumental in equalizing school spending between low- and high-income districts and many reforms do so by raising spending for poor districts. While all reforms reduce spending inequality, there are important differences by reform type: adequacy-based court-ordered reforms increase overall school spending, while equity-based court-ordered reforms reduce the spread of spending with little effect on overall levels; reforms that entail high tax prices (the amount of taxes a district must raise to increase spending by one dollar) reduce long-run spending for all districts, and those that entail low tax prices lead to increased spending growth, particularly for low-income districts. In Part Two, we link the spending and reform data to detailed, nationally representative data on children born between 1955 and 1985 and followed through 2011 (the Panel Study of Income Dynamics) to study the effect of the reform-induced changes in school spending on long-run adult outcomes. These birth cohorts straddle the period in which most of the major school finance reform litigation accelerated, and thus the cohorts were differentially exposed, depending on place and year of birth. We use the timing of the passage of court-mandated reforms as an exogenous shifter of school spending across cohorts within the same district. Event-study and instrumental variable models reveal that that while there are no effects for children from non-poor families, a twenty percent increase in per-pupil spending each year for all 12 years of public school for children from poor families leads to 0.876 more years of schooling, 20.5 percent higher earnings, and an 10.7 percentage point reduction in the annual incidence of adult poverty. The magnitudes of these effects are sufficiently large to eliminate between two-thirds and all of the gaps in these adult outcomes between those raised in poor families and those raised on non-poor families. We present several pieces of evidence to support a causal interpretation of the estimates. The findings present credible evidence that increase in school spending can improve both short- and long-run outcomes for disadvantaged school children.