Recruitment, Effort, and Retention Effects of Performance Contracts for Civil Servants: Experimental Evidence from Rwandan Primary Schools

This paper reports on a two-tiered experiment designed to separately identify the selection and effort margins of pay for performance (P4P). At recruitment stage, teacher labor markets were randomly assigned “pay-for-percentile” or fixed-wage contract. Once recruits placed, an unexpected, incentive-compatible, school-level re-randomization was performed so that some teachers who applied contract ended up being paid by P4P, vice versa. By second year study, within-year effect P4P 0.16 standard deviations pupil learning, with total rising 0.20 after allowing selection. (JEL C93, I21, J23, J33, J41, J45, O15)