Teachers’ Pay for Performance in the Long-Run : Effects on Students’ Educational and Labor Market Outcomes in Adulthood

This paper examines the dynamic effects of a teachers' pay for performance experiment on long-term outcomes at adulthood. The program led to a gradual increase in university education of the high school treated students, reaching a gain of 0.25 years of schooling at age 28-30. The effects on employment and earnings were initially negative, coinciding with a higher enrollment rate in university, but became positive and significant with time. These gains are largely mediated by the positive effect of the program on several high school outcomes, including quantity and quality gains in the high stake matriculation exams