Governments in charge of delivering public services, such as health and education, have recently turned their attention to policy instruments that increase incentives for productivity and quality of delivery, without substantially increasing costs.
New Rules to Increase School Incentives
One of such instruments is competition, generally obtained by allowing the mobility of users and providing comparable information about providers’ outcomes. This new environment has changed the incentives for schools, as their performance can now be compared, but might have distorted teacher incentives in unexpected, maybe undesirable ways. For example, the phenomenon of grade inflation and other teacher incentives have received significant interest by academic research, along with the effects of competition. For instance, Wößmann (2007) used four international students achievement tests across numerous countries to analyse which factors improve student performance: among others, better performance is fostered by school autonomy, competition and external exams that increase school accountability and provide unbiased information to students and employers.
On the other hand, Glewwe et al. (2003) in a randomized evaluation studying the effect of teacher incentive programmes on student learning outcomes has provided surprising evidence: teachers tend to increase effort on improving short-run test scores, by carrying more test preparation sessions, whereas their effort in other dimensions (attendance, methods, etc) did not change. While test scores improved due to the programme, there were no gains in later exams after the incentives were removed. Chan et al. (2007) studied the issue of grade inflation, constructing a signalling model where a certain level of grade exaggeration emerges in equilibrium. This happens when employers do not have enough information to determine whether grades are being inflated. In addition, grade exaggeration policies are strategic complements, thus schools are more likely to inflate grades if other schools are doing it as well.
Introducing Incentives in the Italian Schooling System
In this context, the introduction of the National Assessment System (SVN) within the Italian schooling system since 2007 is an important tool. The SVN was introduced by the National Institute for the Evaluation of the Education System (INVALSI) within selected grades of Primary and Secondary School; it has a widespread coverage and two tests on Mathematics and Italian language are held yearly. Data drawn from statistics published by INVALSI has been used in research to provide insight on the Italian schooling system’s inefficiencies and shed light on its ability to provide equal opportunities. These articles are mostly descriptive and use early data only, but provide insights into the performance of schools.
Montanaro (2008) describes differences in student performance based on geographical areas and family background. His study also reveals significant differences for High School students’ “external” scores (i.e. the INVALSI test) and “internal” evaluation (school specific results). Cipollone et al. (2010) use evolution of INVALSI test scores to measure patterns of High School value-added (by comparing entry and exit proficiency levels of two comparable cohorts of students); high schools located in Southern Italy are characterized by a lower value-added. In addition to the National Assessment System, international measures of performance have been used to assess the relative positioning of Italian schools: one of the most comprehensive ones is the OECD Programme for International Student Assessment (PISA), a triennial assessment of 15-year-old students’ ability to apply their knowledge to real-life situations. Bratti et al. (2007) analysed data drawn from PISA and concluded that geographical performance differences between Northern and Southern Italy are strongly correlated with local school infrastructures and local labour market characteristics.
These methods of evaluation are far from perfect and the potential sources of bias are many: a selection bias might lead to worse performance in schools which are located in more disadvantaged areas, but this does not necessarily mean that these schools are the most inefficient ones. Also, there has been evidence of cheating, with teachers actively improving results to obtain better performance in external evaluations. Despite the incontrollable complex nature of efficiency measurement and teacher incentives, the introduction of external performance measurements is important. Not only is INVALSI a way to improve schools accountability, it also provides fundamental and comparable data for policy evaluation.