Teachers in the United States are compensated largely on the basis of fixed schedules that reward experience and credentials. However, there is a growing interest in whether performance‐based incentives based on rigorous teacher evaluations can improve teacher retention and performance. The...

A common criticism of merit-pay plans is that they fail to systematically target rewards to the most effective teachers. This study presents new evidence on this issue by evaluating data from Tennessee's Career Ladder Evaluation System and the Project STAR class-size experiment. Because the...