A teacher-incentive program in South Carolina has led to striking long-term benefits for students, including lower rates of felony arrest and reduced reliance on government assistance in early adulthood, a new study reports.

Ozkan Eren, a professor of economics at UC Riverside, co-authored the study with colleagues at the University of Michigan and University of South Carolina.

The researchers analyzed administrative data on 41,529 eighth-grade students: 60% from schools that adopted the Teacher Advancement Program between 2007 and 2010, and 40% from schools that didn’t. The schools in the study were in high-need districts. 

Students who attended TAP schools were about 5% more likely to graduate from high school, 30% less likely to be arrested for a felony offense, and 4% less likely to need government assistance, such as food stamps, in early adulthood, the study found. 

TAP is a school-reform model that combines performance pay for teachers with classroom observation and instructional feedback. It has been implemented in hundreds of school districts across nearly 20 states.

The paper is the first to evaluate how incentive pay shapes U.S. student outcomes beyond test scores, Eren said. It was published in the January issue of the Journal of Public Economics.

“I wasn’t surprised that TAP improved short-run academic performance,” Eren said. “I was surprised by the across-the-board long-run effects, by which I mean the effects on educational attainment, crime, and economic self-sufficiency.”

The findings come amid persistent debates about how to improve low-performing schools. Large-scale reforms, such as state takeovers or charter conversions, can disrupt student education and cause political strife, Eren said. They can also be expensive.

TAP offers a different model — one that works largely within existing school structures and focuses on improving teaching quality through incentives and support.

The study may be of particular interest to lawmakers: It shows that TAP is exceptionally cost-effective. Using a standard policy metric known as the marginal value of public funds, the researchers calculate that each $1 spent on TAP generated roughly $14 in social benefits. 

Unlike many teacher-incentive programs that only offer performance pay, TAP in South Carolina aimed to improve teaching more broadly. Teachers were evaluated multiple times each year, received detailed feedback, and were eligible for substantial bonuses based on a combination of classroom observations, growth in student achievement, and overall school performance. 

The researchers conducted the study by assembling administrative records that linked students to their schools, teachers, and long-term outcomes. They tracked multiple cohorts of students from middle school into early adulthood, following their educational progress, interactions with the criminal justice system, and participation in government assistance programs. The study used variation in when and where schools adopted TAP to isolate the effect of this comprehensive school reform.

The researchers believe that other performance-pay initiatives may fail because they offer financial rewards without providing teachers with tools or guidance on how to meet performance targets. For example, a randomized trial in Nashville, Tennessee, offered large individual bonuses tied to test score gains but did not include professional development, classroom observations, or instructional feedback. It produced no meaningful improvements in student test scores.

Similar results emerged from teacher-incentive programs in New York City and North Carolina, where performance pay was implemented with little guidance on how to improve instruction, yielding negligible — or even negative — effects on test scores.

TAP, by contrast, paired incentives with regular observations, feedback, coaching, and collaborative professional development, and “it was this comprehensive design that likely contributed to its success,” Eren said.

(Header image: Getty Images/Martine Severin)