Tournaments, gift exchanges, and the effect of monetary incentives for teachers: the case of Chile

Abstract

In this paper we evaluate the introduction in Chile of monetary incentives for teachers, based on a school performance tournament. We evaluate the tournament effect, i.e. the effect of introducing the incentive scheme on all participant schools, both winning and losing. We also evaluate the effect of winning the tournament on the next school performance period, which we call the gift-exchange effect. Matching and regression discontinuity techniques are used to identify both treatment effects. The results indicate a positive and significant tournament effect and a positive but nonsignificant gift-exchange effect.