Title: Can teachers’ rewards improve educational outcomes? The role of financial and non-financial rewards
Description: Inspired by the theoretical power of rewards in the labor market, to improve educational outcomes, this paper tests if giving a non-financial reward along with a financial one can result in higher student ex-post outcomes than just a financial incentive. The underlying mechanism by which non-financial reward might work is explored as well. The argument is based on Benabou and Tirole (2002)’s model, that non-financial reward may affect teachers’ self-esteem and, with that, their effort, and thereby the student outcomes after the reward is given. This is accomplished by exploiting a discontinuity in the running variable used to assign the Teaching Excellence Award (AEP for its initials in Spanish). A Sharp Regression Discontinuity Design is used to identify the effect of AEP using data for more than 5,000 math and language teachers. The dataset includes the teaching evaluation score that AEP gives every year to their applicants, the corresponding standardized test score of more than 100,000 students, (SIMCE for its initials in Spanish), school characteristics, and information about motivation and self-perception that teachers self-report in a survey administrated by SIMCE along with the standardized test every year.

The results show that rewarding teachers by giving a non-financial reward along with a financial one does not work in the intended way. I find a not statistically significant effect of giving a reward to teachers with outstanding teaching skills and pedagogical knowledge on student test scores, teaching practices, teacher’s self-confidence in a window of three years after the certification process. Lastly, there is no evidence of teacher-student or teacher-school sorting as an ex-post effect of obtaining the certification.