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Tournament Incentives for Teachers: Evidence from a Scaled-Up Intervention in Chile

In this article we evaluate the effects of the introduction of group monetary incentives for teachers, based on a school performance tournament in Chile. This is particularly relevant to analyze since it is the only scaled-up incentive program for teachers in the world. We evaluate the tournament effect, that is, the effect of introducing the incentive scheme on all participant schools, both winning and losing. We compare public and private subsidized schools to private fee-paying schools following a matched difference in difference and using three different empirical approaches. We explore the heterogeneous impact of the treatment through the distribution of the probability of winning. The results indicate a positive and significant tournament effect especially for schools that are very likely to win, which we call “on the money.”