Spending on Education

Brandon Williams

Development Economics

November 19, 2024

Spending on Education

Development Economics

November 19, 2024

Inputs, Incentives, and Complementarities (2019)

  • Education may be constrained by low effort (e.g. absenteeism)
  • Or it may be constrained by resources (but does "throwing money" at the problem solve it?)
  • Complementarity: the impact of jointly increasing both may be greater than the sum of doing each individually
  • 350 schools in Tanzania, sorted into 3 treatments:
    • Unconditional grants
    • Teacher incentives from student performance
    • Both
  • Context: country with promising enrollment in schools but poor performance (less than 12% of grade 3 students reading at level)

Incentives of State Personnel

Development Economics

Inputs, Incentives, and Complementarities (2019)

Schools are spending more

But (correctly) not in the incentives treatment

Household spending drops but not enough to offset

November 19, 2024

Incentives of State Personnel

Development Economics

Inputs, Incentives, and Complementarities (2019)

Evidence of complementarities in grant and teacher incentives

\max_e U_i (e) = W + \lambda_i \Delta L - c_i(e)

Choose effort

Wage

Intrinsic benefit from a change in learning

s.t.

W = S + b \Delta L \\ \Delta L = f(e,I) \\ \Delta L \geq \underline{\Delta L} \geq 0

Base pay plus possible incentives

Production of effort and other inputs

Wth normal and reasonable assumptions about the shape of these, including:

f_{ei} > 0

November 19, 2024

Bare minimum effort to not be fired

Incentives of State Personnel

Development Economics

Inputs, Incentives, and Complementarities (2019)

Evidence of complementarities in grant and teacher incentives

\max_e U_i (e) = W + \lambda_i \Delta L - c_i(e)

Choose effort

Wage

Intrinsic benefit from a change in learning

s.t.

W = S + b \Delta L \\ \Delta L = f(e,I) \\ \Delta L \geq \underline{\Delta L} \geq 0

If no incentives and motivation is low:

b + \lambda_i \approx 0

Inputs increase, but teachers can re-optimize and achieve the required minimum change in learning by decreasing effort

This equation binds

November 19, 2024

Incentives of State Personnel

Development Economics

Inputs, Incentives, and Complementarities (2019)

Evidence of complementarities in grant and teacher incentives

\max_e U_i (e) = W + \lambda_i \Delta L - c_i(e)

Choose effort

Wage

Intrinsic benefit from a change in learning

s.t.

W = S + b \Delta L \\ \Delta L = f(e,I) \\ \Delta L \geq \underline{\Delta L} \geq 0

If no incentives and motivation is low:

b + \lambda_i >> 0

One channel is that intrinsic motivation is far from 0, and then inputs will generate a change

November 19, 2024

Incentives of State Personnel

Development Economics

Inputs, Incentives, and Complementarities (2019)

Evidence of complementarities in grant and teacher incentives

\max_e U_i (e) = W + \lambda_i \Delta L - c_i(e)

Choose effort

Wage

Intrinsic benefit from a change in learning

s.t.

W = S + b \Delta L \\ \Delta L = f(e,I) \\ \Delta L \geq \underline{\Delta L} \geq 0

If no incentives and motivation is low:

b + \lambda_i >> 0

The other channel is to force this higher with change in incentives and then increase outputs, to take advantage of

f_{ei} > 0

November 19, 2024

Incentives of State Personnel

Development Economics

Inputs, Incentives, and Complementarities (2019)

We need to clear this

Or, effort drops

And we see no gains

Even as inputs increase

November 19, 2024

Incentives of State Personnel

Development Economics

Inputs, Incentives, and Complementarities (2019)

Schools see little result from increasing funding

Overall, our results are consistent with and add to a large body of research that finds that merely increasing school resources rarely improves student learning outcomes in developing countries

November 19, 2024

Incentives of State Personnel

Development Economics

Inputs, Incentives, and Complementarities (2019)

Schools see little result from increasing funding

Teacher incentives seem to have little benefit on "low stakes" results

Evidence of complementarities in grant and teacher incentives

November 19, 2024

Spending on Education

Development Economics

November 19, 2024

Inputs, Incentives, and Complementarities (2019)

  • Education may be constrained by low effort (e.g. absenteeism)
    • "Even well motivated staff may not be able to deliver services effectively if they lack the resources to do so."
  • Or it may be constrained by resources (but does "throwing money" at the problem solve it?)
    • "Large and growing body of evidence on the limited impact on learning outcomes of simply providing more resources"
  • Complementarity: the impact of jointly increasing both may be greater than the sum of doing each individually
    • " Our results show that the marginal returns of introducing reforms to better reward improved effort of frontline service providers may be particularly high in settings where inputs are being expanded."