Pay-for-performance is a popular public education reform, but there is little evidence about the characteristics of a well-designed incentive pay plan for teachers. Some of the literature suggests that effective incentive plans must offer relatively large awards to induce behavioral changes. On the other hand, the experimental economics literature…

A policy analysis of Florida's 10-factor Performance-Based Funding system for state universities. The focus of the article is on the system of performance metrics developed by the state Board of Governors and their impact on institutions and their missions. The paper also discusses problems and issues with the metrics, their ongoing evolution, and…

The purpose of this study was to develop a model that may be used to estimate the financial costs of teacher turnover in urban school districts. It is estimated that 50% of the beginning teachers leave the profession within the first five years on the job (Murname, Singer, Wilett, Kemple, and Olsen 1991; Colbert and Wolff 1992; Ingersoll 2003;…

Severe fiscal tensions threaten U.S. public higher education. Many policy solutions have been suggested, but it is difficult to subject these qualitative ideas to rigorous empirical evaluation. In this work, we employ an agent-based model of a representative state-funded public university system (including a flagship campus, an urban campus, and…

This article examines the relative production efficiency of school districts in Georgia using the modified quadriform method. Overall, we find that the modified quadriform allows state-level policymakers to access a basic tool for analysis that makes relative comparison of school district productivity for use in policy analysis and policy…

Using a reduced form version of a theoretical expansion of Hoxby's (1996) education production model, we investigate whether bargaining teachers unions are a boon or a bust to the economy of the state. We anticipate teachers, being in the public sector veiled from competition, are less likely to be efficient. Yet, their product, education,…

Researchers have long searched for a relationship between school resources and student achievement. The search for this relationship has relied heavily on the use of education production functions. Despite years of research on this topic, there has been little agreement concerning which resources are the most essential variables to increase…

In response to demands for school accountability, states now devote much attention to distinguishing among effective and ineffective schools. These efforts, while varying considerably in rigor and sophistication, generally emphasize technical or allocative efficiency (e.g., the marginal productivity of measured inputs employed in various…

Discusses problems in applying cost-benefit analysis to higher education, including selecting the correct productivity index, determining the discount rate for social consumption foregone, measuring individual and social costs and benefits, and defining the time horizon for educational investment returns. Contrasts cost-benefit and…

Examines merit pay in terms of utility maximization, which assumes an employee exerts an amount of effort providing the greatest individual utility. Pay incentives succeed when technologies are clearly specified, productivity is easily measurable, employees understand the reward structure, and risk and uncertainty are minimal. Includes 11…

If money truly does not matter, and disadvantage cannot be quantified in terms of valuable social or economic goods, then questions of justice become aridly academic. How are resources to be valued? Faulty research design skewed Eric Hanushek's results. More precisely designed studies are revealing relationships between school expenditures and…

Discusses the use of economic analysis to examine relationships between school resources and school outcomes. Outlines a conceptual framework that employs a systems approach to analyze the efficiency of school resource allocation. (JG)

Discusses school finance data needs, highlighting discrepancies between available data and emerging policy issues surrounding resource origination, disposition, and utilization; and data usage. Discusses some innovative data uses (allocating teachers' and students' time) in New York State and recommends ways to assure the alignment of collected…

Presents a method for estimating a cross-sectional index of the cost of education. The index is based on a variant of the Cobb-Douglas function, which takes into account the process and the quality of the inputs used. (Author/IRT)

Clear funding/achievement relationships are emerging from the recent body of production-function research. Money does matter in producing educational outcomes. Factors such as small class size and teacher experience can drive up instructional costs. Schools cannot operate efficiently with scanty resources. Equalizing quality resource inputs is a…