Abstract
Previous research on teacher merit pay has concluded that its failure is due to the complexity of teachers' jobs and the need for teamwork and cooperation in schools. This research re-opens the issue by comparing the use of merit pay in public and private schools. Merit pay is used in a large number of private schools. Awards are not trivial; nor is it the case that merit pay is awarded to nearly everyone. Reasons for the failure of merit pay are not inherent in teaching, but are due to specific circumstances in public education, notably the opposition of teacher unions. [JEL I20]
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