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Paying Teachers to Perform: The impact of bonus pay in Pernambuco, Brazil

What will it take for schools in developing countries to deliver good quality education? This research study presents the impact evidence of a program that aims at making schools more accountable. To view more research studies go to Impact Evaluation Profiles 
Teacher pay is overwhelmingly based on educational background, training and experience, rather than performance. Yet variations in teacher effectiveness (measured as the ability to generate student learning gains) can be substantial, even across different classrooms in the same grade in the same school. In this context, a growing number of school systems are adopting reforms to link teachers’ compensation more directly with their performance. This impact evaluation of a school-based teacher bonus program in Brazil has found that setting and rewarding specific annual targets for improvement in school results can stimulate significant increases in student learning and graduation rates. However, researchers are continuing to track the reform for signs of diminished impact over time and/or possible adverse effects (teaching to the test, cheating, etc).
The Intervention | The Impact  | Specialist Profiles | Links  


The Northeast state of Pernambuco was one of the worst performing education systems in Brazil in 2007 -- it ranked last among Brazil’s 26 states on primary school test scores and graduation rates and near the bottom for secondary education. With 900 schools, 900,000 students and 50,000 teachers, the state-run system in Pernambuco represents about 40% of total basic education enrollments in the state. Pioneered by a dynamic Governor, the bonus program was introduced in late 2008 to try to boost the state’s performance. Under the program, each of Pernambuco’s state-managed schools receives annual targets for improvement in its student test scores and pass rates at both the primary and secondary levels; this combination discourages schools from automatic promotion of children who are not learning, but it also discourages schools from excessively high retention rates, which is a phenomenon in Brazil. The size of the bonus for each school depends upon how close it comes to achieving its annual performance targets; in the first three years, it has averaged 1-2 months’ salary for most school personnel. Schools failing to achieve at least 50% of their targets receive no bonus.

The Impact

  • Schools with more ambitious “stretch” targets in the first year achieved more progress than similar schools with less challenging targets
  • Schools that just missed receiving the bonus in 2009 improved more in 2010 than schools that barely achieved the bonus in 2009
  • Schools whose teachers spent more time on instruction were much more likely to achieve the bonus
  • Pernambuco state schools raised learning outcomes much faster than both other Northeast Brazil states and municipal schools in Pernambuco since 2008; difference in differences analysis suggests the bonus program has had a positive overall impact

Specialist Profiles

Claudio Ferraz is an Assistant Professor of Economics at the Catholic University in Rio de Janeiro, Brazil. His areas of interest are development, political economy and public economics. In particular, his research focuses on governance and accountability in developing countries and its consequences for politics and public service delivery. His ongoing projects examine how voters react to information campaigns; whether pay-for-performance improves the quality of education; and whether increases in the quality of politicians affect public policies.

Barbara Bruns is the Lead Economist in the Latin America and the Caribbean Region, World Bank, responsible for education. She is currently co-managing several impact evaluations of teacher pay for performance reforms in Brazil and is lead author of Achieving World Class Education in Brazil: The Next Agenda (2011). She is also co-author of the new HDN publication Making Schools Work: New Evidence on Accountability Reforms (2011) with Deon Filmer and Harry Patrinos. As the first manager of the Spanish Impact Evaluation Fund (SIEF) at the World Bank from 2007-09, Barbara also oversaw the launch of more than 50 rigorous impact evaluations of health, education and social protection programs. Barbara has degrees from the London School of Economics and the University of Chicago.


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