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This paper studies the impact of centralizing deployment on teachers’ effort and students achievement by exploring the reforms of rural education system in China. As regular teachers’ payroll was moved from xiang (or school district) up to county government in 2001, the power of deployment has been gradually transfered along the same line. We exploit variations in transfer timing and use as comparison contract teachers who were not affected. Teacher data collected from Gansu province in 2000 and 2004 shows that, the increase of regular teachers’ effort relative to contract teach- ers in xiangs having centralized deployment by 2003 is smaller than that where the transfer had not happened. Student test scores also had a smaller increase in central- ization xiangs. Exploring into teacher allocation and wages suggests a likely channel: the implementation of performance pay is hindered as personnel interventions from upper-level government noises teachers performance evaluation.
UC Berkeley on May 6-7, 2011 Link to Book