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Muralidharan Explores Teaching Incentives in India

Posted: January 28, 2008

When Harvard Ph.D. candidate, Karthik Muralidharan, decided to spend a year lecturing and conducting postdoctoral research at HGSE, he already had a faculty position at the University of California at San Diego. As an economist whose research focuses on improving education and health in developing countries, Muralidharan wanted to spend some time in an environment that focused on education. “The world is an uneven playing field... and providing a quality education to every child is the best place to start leveling it,” he says.

This uneven playing field couldn’t be more evident than in Muralidharan’s native India. Although more than 93 percent of Indian children attend school, a recent report showed that 52 percent of children aged 7 to 14 in rural India could not read a simple paragraph of second-grade difficulty.

The reason for this is an education system that has focused mostly on access, enrollment, and retention of students as opposed to learning outcomes and teacher effectiveness, he says. For the first part of his dissertation, Muralidharan surveyed a representative sample of more than 3,000 public schools across India to measure the quality of public service delivery in education. The study found that on any given day, 25 percent of teachers were absent from work and less than half the teachers on payroll were even teaching. 

Following the work on teacher absence, Muralidharan realized that low accountability— only one out of 3,000 schools reported firing a teacher for repeated absence—and the complete lack of differentiation between teachers on the basis of performance, were part of a systematic problem. As a result, hard-working teachers were “demotivated” by the system, he says. The data also showed that highly-paid teachers were absent more often, and suggested that what mattered for teacher effectiveness was not the level of pay, but how the pay was structured.

In 2005, with the cooperation of the government of the Indian state of Andhra Pradesh, the World Bank, and the Azim Premji Foundation, Muralidharan began work on the second part of his dissertation designing and evaluating the impact of a performance-pay program for teachers. The program provided bonus payments to teachers based on the average improvement of their students’ test scores in independently-administered learning assessments with a mean bonus of 3 percent of annual pay. Muralidharan evaluated four different facets of the program including the impact of performance pay on learning, whether it led to any negative consequences on the teachers, the difference between group incentives and individual, and the relative effectiveness of teacher performance pay versus spending the same money on additional school inputs.

By the end of two years of the program, students in incentive schools performed significantly better than those in control schools. Incentive schools also performed better on subjects for which there were no incentives, such as science and social studies, which suggests positive spillovers across subjects, he says. While group and individual incentive schools performed equally well in the first year of the program, the individual incentive schools significantly outperformed in the second year. Both group and individual incentive schools also performed significantly better than other randomly chosen schools that received additional schooling inputs of a similar value. 

“The absence work combined with this work has served to highlight that improving education outcomes is not just about spending more money,” Muralidharan says. “Clearly, resources matter—but this research suggests that improving incentives for teachers can have a bigger impact.”

Muralidharan plans to continue this research for five years to study the long-term impact of the various input and incentive programs on student learning, but his work is already having an impact, even beyond India. He is helping the government of Indonesia to evaluate a recent policy to increase teacher salaries and is a featured speaker at the forthcoming National Conference on Performance Incentives.

In the coming years, Muralidharan expects his research to focus on systematically evaluating the effectiveness of various policy options to improve education in developing countries through rigorous randomized evaluations. “Some of the most exciting research in education is happening in developing countries with experimental methods,” he says. “HGSE students can get exposed to these methods in my course on the economics of education in developing countries in spring 2008.”