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Abstract

The literature surrounding education connects merit pay systems that compensate teachers for their performance to improvements in student outcomes. Teacher payment systems are important to the economics of education policy, not only because teachers are paid using these systems, but also because they are a tool to improve student outcomes. There are criticisms concerning the implementation of a merit pay system including inequality, subjectivity, and unintended consequences. Data on student achievement based on the National Report Card of 2022 and performance-based pay systems seem to have inconsistent implications for the merit of a performance pay system. Considering this, letting the districts decide their pay system is the best policy option.

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