Double for Nothing? : Experimental Evidence on an Unconditional Teacher Salary Increase in Indonesia

How does a large unconditional increase in salary affect the performance of incumbent employees in the public sector? This paper presents experimental evidence on this question in the context of a policy change in Indonesia that led to a permanent...

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Main Authors:	de Ree, Joppe, Muralidharan, Karthik, Pradhan, Menno, Rogers, Halsey
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2017
Subjects:	EDUCATION POLICY TEACHER WAGES SERVICE DELIVERY TEACHER COMPENSATION LABOR MARKET
Online Access:	http://documents.worldbank.org/curated/en/616961512396126770/Double-for-nothing-experimental-evidence-on-an-unconditional-teacher-salary-increase-in-Indonesia http://hdl.handle.net/10986/28987

id	okr-10986-28987
recordtype	oai_dc
spelling	okr-10986-289872021-06-08T14:42:47Z Double for Nothing? : Experimental Evidence on an Unconditional Teacher Salary Increase in Indonesia de Ree, Joppe Muralidharan, Karthik Pradhan, Menno Rogers, Halsey EDUCATION POLICY TEACHER WAGES SERVICE DELIVERY TEACHER COMPENSATION LABOR MARKET How does a large unconditional increase in salary affect the performance of incumbent employees in the public sector? This paper presents experimental evidence on this question in the context of a policy change in Indonesia that led to a permanent doubling of teachers' base salaries. The analysis uses a large-scale, randomized experiment across a representative sample of Indonesian schools that accelerated this pay increase for teachers in treated schools. The findings show that the large pay increase significantly improved teachers' satisfaction with their income, reduced the incidence of teachers holding outside jobs, and reduced self-reported financial stress. Nevertheless, after two and three years, the increase in pay led to no improvement in student learning outcomes. The effects are precisely estimated, making it possible to rule out even modest positive impacts on test scores. The results suggest that unconditional pay increases are unlikely to be an effective policy option for improving the effort and productivity of incumbent employees in public sector settings. 2017-12-07T21:24:21Z 2017-12-07T21:24:21Z 2017-12 Working Paper http://documents.worldbank.org/curated/en/616961512396126770/Double-for-nothing-experimental-evidence-on-an-unconditional-teacher-salary-increase-in-Indonesia http://hdl.handle.net/10986/28987 English Policy Research Working Paper;No. 8264 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper East Asia and Pacific Indonesia
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	EDUCATION POLICY TEACHER WAGES SERVICE DELIVERY TEACHER COMPENSATION LABOR MARKET
spellingShingle	EDUCATION POLICY TEACHER WAGES SERVICE DELIVERY TEACHER COMPENSATION LABOR MARKET de Ree, Joppe Muralidharan, Karthik Pradhan, Menno Rogers, Halsey Double for Nothing? : Experimental Evidence on an Unconditional Teacher Salary Increase in Indonesia
geographic_facet	East Asia and Pacific Indonesia
relation	Policy Research Working Paper;No. 8264
description	How does a large unconditional increase in salary affect the performance of incumbent employees in the public sector? This paper presents experimental evidence on this question in the context of a policy change in Indonesia that led to a permanent doubling of teachers' base salaries. The analysis uses a large-scale, randomized experiment across a representative sample of Indonesian schools that accelerated this pay increase for teachers in treated schools. The findings show that the large pay increase significantly improved teachers' satisfaction with their income, reduced the incidence of teachers holding outside jobs, and reduced self-reported financial stress. Nevertheless, after two and three years, the increase in pay led to no improvement in student learning outcomes. The effects are precisely estimated, making it possible to rule out even modest positive impacts on test scores. The results suggest that unconditional pay increases are unlikely to be an effective policy option for improving the effort and productivity of incumbent employees in public sector settings.
format	Working Paper
author	de Ree, Joppe Muralidharan, Karthik Pradhan, Menno Rogers, Halsey
author_facet	de Ree, Joppe Muralidharan, Karthik Pradhan, Menno Rogers, Halsey
author_sort	de Ree, Joppe
title	Double for Nothing? : Experimental Evidence on an Unconditional Teacher Salary Increase in Indonesia
title_short	Double for Nothing? : Experimental Evidence on an Unconditional Teacher Salary Increase in Indonesia
title_full	Double for Nothing? : Experimental Evidence on an Unconditional Teacher Salary Increase in Indonesia
title_fullStr	Double for Nothing? : Experimental Evidence on an Unconditional Teacher Salary Increase in Indonesia
title_full_unstemmed	Double for Nothing? : Experimental Evidence on an Unconditional Teacher Salary Increase in Indonesia
title_sort	double for nothing? : experimental evidence on an unconditional teacher salary increase in indonesia
publisher	World Bank, Washington, DC
publishDate	2017
url	http://documents.worldbank.org/curated/en/616961512396126770/Double-for-nothing-experimental-evidence-on-an-unconditional-teacher-salary-increase-in-Indonesia http://hdl.handle.net/10986/28987
_version_	1764468203009867776

Double for Nothing? : Experimental Evidence on an Unconditional Teacher Salary Increase in Indonesia

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