Merit awards as labor-market signals of principal effectiveness¶

Theory · All theories
Evidence · 2 claims (1 for, 1 mixed) · 2 studies (2 causal), q2–q3 · 0 of 2 report an effect size · 1 claim rests on one study

Description¶

The article advances a signaling account of merit awards: although awards are intended to induce effort, they may also convey new information to outside employers. As the article states, a merit award system "may also produce unintended consequences if it provides new information to the labor market that enables outside employers to differentiate workers more accurately by their effectiveness." The observed exit pattern of award winners is read as consistent with this account.

Design Implications¶

Context¶

Requirements¶

• A labor market of outside employers able to observe the award and use it to differentiate workers

Constraints¶

• The exit evidence is described as consistent with signaling, not as a direct test of employer behavior

Target Learners¶

• school principals

Target Learning Objectives¶

• incentive effects of merit awards on educator effort, retention and labor-market outcomes

Claims¶

• Merit Award Winners Twice Likely To Exit School [+M]
• The merit award program produced modest achievement improvements concentrated in schools close to the award threshold [~M]

Related Theories¶

Examples¶

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Key Sources¶

• Signaling effects of merit awards: Evidence from school principals in Chicago. (2023). Economics of Education Review. https://www.sciencedirect.com/journal/economics-of-education-review