Economics Seminar Series: Julie Cullen, UC San Diego

Title: Performance Information and Personnel Decisions in the Public Sector: The Case of School Principals (with Hanushek, Phelan, and Rivkin)

2019.08.06 | Charlotte Sparrevohn

Date Tue 10 Sep
Time 14:15 15:30
Location Fuglesangs Allé 4, 8210 Aarhus V, building 2632(L), room 242

Presenter: Julie Cullen, UC San Diego

Title: Performance Information and Personnel Decisions in the Public Sector: The Case of School Principals (with Hanushek, Phelan, and Rivkin)

Abstract: School accountability systems standardly report both categorical ratings and the underlying student pass rates that determine them, permitting direct investigation of how different information affects labor market outcomes of school leaders. We first use regression discontinuity design methods to investigate how outcomes vary, holding principal effectiveness constant. Results reveal large and significant impacts on principal salaries and job retention for crossing the unacceptable-acceptable boundary but not for crossing higher-ratings cutoffs. Complementary descriptive regressions corroborate these findings and also reveal that principal salary growth is higher when school pass rates are higher. Considering a composite measure of labor market success and controlling for pass rates, rewards for less readily available measures of effectiveness as well as for attaining better ratings are apparent only for the current district. The overall patterns suggest that school district administrators access and use more continuous information but also face pressure to respond to the stigma of low ratings. This apparent information breakdown could nonetheless be welfare improving if it raises the distribution of principal quality through disproportionate departures of less effective school leaders. However, the extensive overlap of achievement value-added distributions across school rating categories suggests that a categorical accountability system based on pass rates does not distinguish well among principals who lead schools with very different average achievement growth. Moreover, it almost certainly disadvantages principals in schools serving low-income populations that already have general difficulties in attracting and retaining effective educators.

Host: Maria Humlum

Organizer: Timo Hener & Michael Koch

Economics Seminar Series