Teacher labor markets in developing countries
The review finds that teaching quality and student achievement are sensitive to both the level and structure of teacher compensation. However, teachers do not always respond to incentives in predictable ways. To be effective, the design of teacher incentives is critical: incentive schemes must be tightly coupled with the desired teacher behaviours, and generous enough to give teachers a reason to make the extra effort.
Importantly, however, the research also suggests that reforms that are not specifically designed to affect teachers can also influence the characteristics of those who choose to enter and remain in teaching, as well as their work in classrooms. In particular, school-based management reforms that devolve decision-making authority to the schools, for example, have had important effects on teacher performance and student learning by making teachers (and schools) more accountable to their communities. Devolution of decision-making authority to schools in Central America has, in many cases, led to lower teacher absenteeism, more teacher work hours, more homework assignments, and better parent-teacher relationships. In some cases, these reforms can have a greater effect on student outcomes than increased rewards for teachers.