The Effects of Performance Pay Among Private School Teachers in Pakistan

Christina Brown
Tahir Andrabi
Fieldwork by:
317 schools and 3,400 teachers
Target group:
  • Primary schools
  • Secondary schools
  • Teachers
Outcome of interest:
  • Student learning
  • Provider Performance
  • Service provider performance
Intervention type:
  • Incentives
  • Social networks
AEA RCT registration number:
Research papers:

Incentive pay may be an effective way to increase teacher effort, but it is unclear what types of incentive schemes work best in attracting and retaining good teachers and motivating their performance. Researchers are working with a large private school network in Pakistan to evaluate the effects of performance raises based on observed performance versus those based on student performance on teacher behavior and student learning.

Policy issue

In the past decade, there has been growing interest in linking teachers’ salaries to student learning outcomes. Incentive pay is one commonly used method to motivate teacher effort, but it is unclear what types of incentive pay schemes work best. For instance, objective incentive schemes where teachers’ salaries are tied to measurable student outcomes, such as standardized test scores, have gained popularity in both developed and developing countries over the past decade. However, this type of incentive pay can be cost prohibitive for schools in low-income settings where standardized tests may be too costly to implement. Subjective performance pay, in which the supervisor determines the incentive amount based on her own observations of teacher performance, is another common type of incentive in many sectors and could be advantageous in settings where there are cost or implementation concerns around designing or administering appropriate tests. However, concerns around favoritism could limit the effectiveness of this type of incentive scheme. How can schools improve teacher performance in a cost-effective way? What are the relative effects of subjective performance pay versus objective incentives schemes, compared to a simple flat salary, on student outcomes? Finally, what is the effect of these policies of who enters and exits teaching under these contracts.

Context of the evaluation

Between 2000 and 2005, the number of private schools in Pakistan grew rapidly from about 32,000 to 47,000 schools.(1)By the end of 2005, one in every three primary school-enrolled children was studying in a private school. The success of private schools is attributed in part to better learning and lower enrollment fees; test scores of children enrolled in private schools tend to be higher compared to public schools, and the enrollment fee per student can be 20 to 50 percent lower compared to public schools.(2) Private schools that keep their fees low are therefore able to target poor families who are looking for low cost, quality education.

Photo: Aleem Zahid Khan |

Details of the intervention

Researchers are partnering with a large private school network in Pakistan, to evaluate the effects of objective versus subjective performance incentive pay on teacher classroom behavior and student performance.

Researchers are currently implementing this study with 3,400 teachers across 217 schools. Schools are randomly assigned into one of the following groups:

  1. Subjective performance group (131 schools): All teachers will be rated on a scale from 0-100 by their direct supervisor (usually a principal or vice principal) according to their efforts in improving students’ academic performance. Within each school, teachers will also be ranked against each other using this subjective score, and receive an additional raise of 0 – 10 percent based on their rank.
  2. Objective performance group (43 schools): All teachers will receive a raise based on their students’ average performance on a standardized exam at the end of the semester. Within each school, teachers will also be ranked against each other based on the average performance of their students, and receive an additional raise of 0 – 10 percent based on their rank.
  3. Flat raise group (43 schools): All teachers in this group will receive a 5 percent raise at the end of the calendar year, which is standard pay scheme for professional sector jobs in the region. The performance of teachers who receive subjective or objective pay schemes will be compared to the performance of teachers in this group.

Among 99 randomly selected schools, school principals will also vary the amount of time they observe each teacher’s class: from 20 minutes every other week in the subjective and objective performance groups, to 20 minutes once every two months for the comparison group. In addition to this, researchers will also randomly provide teachers with preliminary performance data at the end of the first term of the study to understand how this effects their decision to leave teaching or to switch schools.

Results and policy lessons

Results forthcoming.

Brown, Christina, Andrabi, Tahir. How do Principals Reward Teachers? Understanding Subjective Performance Pay. PPE Initiative Proposal, 2018.

Andrabi, Tahir, Das, Jihnu, Khwaja, Asim Ijaz, Vishwanath, Tara, Zajonc, Tristan. “Learning and Educational Achievements in Punjab Schools (LEAPS): Insights to inform the education policy debate.” February 2007.
Andrabi, Tahir, Das Jishnu, Khwaja Asim I, Ozyurt, Selcuk, Singh, Niharika. “Upping the Ante:The Equilibrium Effects of Unconditional Grants to Private Schools.” Working Paper, July 2018.