Principals as Agents? Investigating Accountability in the Compensation and Performance of School Principals

Although school accountability incentives and standards, such as district-mandated goals and state sanctions for poor performance, are increasingly common, few studies have investigated their effectiveness. The author of this paper seeks evidence on whether such policies affect public secondary principal pay and school performance. An analysis of cross-sectional variation in data from the 1999–2000 Schools and Staffing Survey indicates that accountability policies coincided with lower college matriculation rates and lower principal pay, particularly for the best principals. On the other hand, the policies were associated with higher student retention rates at the worst schools. Though principals at those schools may not have been directly rewarded through accountability policies, these principals appear to have acted as agents for students in danger of dropping out.