From introduction to termination: the effect of teacher incentive pay on test scores

Teachers are among the most influential school-level factors in student learning, motivating the use of incentive pay programs to enhance teacher quality and effectiveness. However, little research examines the consequences of discontinuing such programs. This study evaluates the effects of both implementing and terminating teacher incentive pay on student academic achievement. Fixed effects and difference-in-differences models show positive impacts on overall performance, particularly in mathematics, with larger gains for minority students. Importantly, discontinuing incentive pay did not negatively affect academic outcomes. These findings provide new insights into the full lifecycle of teacher incentive policies and their implications for educational equity.