Financial incentives for teachers to increase student performance is an increasingly popular education policy around the world. This paper describes a school-based randomized trial in over two-hundred New York City public schools designed to better understand the impact of teacher incentives on student achievement. I find no evidence that teacher incentives increase student performance, attendance, or graduation, nor do I find any evidence that the incentives change student or teacher behavior. If anything, teacher incentives may decrease student achievement, especially in larger schools. The paper concludes with a speculative discussion of theories that may explain these stark results.
There really don't seem to be very many scalable ways to boost student performance at this point. Smaller class sizes or schools, early childhood education, even some school choice measures; all don't seem to improve test scores in a systematic way. Add to that now merit pay -- which, if anything, reduces scores.
If anything, this points to the edu-nihilist point that what goes in classrooms doesn't seem to impact what children know very much. Perhaps peer effects or family background are more important, or else variation across teachers just isn't very informative. One logical strategy in response to this information would be to forget about trying to raise test scores, and settle for providing schooling services at minimum cost.