The Interplay of Standardized Tests and Incentives – An Econometric Analysis with Data from PISA 2000 and PISA 2009

Since their first implementation in 2000, the PISA studies have attracted public attention and spurred the demand for institutional changes in schooling systems. The introduction of standardized student tests and of incentives for schools and teachers are notable examples of such institutional changes. This paper examines the effects of these particular developments. Identification is based on within-country variation between PISA 2000 and PISA 2009. The results indicate that comparing schools by means of standardized student test results is a promising measure, while evaluating teachers this way decreases the overall performance of a schooling system. The discussion provides possible explanations for these ambiguous findings.