Sarena Goodman

The Design of Teacher Incentive Pay and Educational Outcomes: Evidence from the New York City Bonus Program

Teacher compensation schemes are often criticized for lacking a performance-based component. Proponents argue that teacher incentive pay can raise student achievement and stimulate system-wide innovation. We examine a group-based teacher incentive scheme implemented in New York City and investigate whether specific features of the program contributed to its ineffectiveness. Although overall the program had little effect on student achievement, we show that in schools where incentives to free ride were weakest, the program led to small increases in math achievement. Our results underscore the importance of carefully considering the design of teacher incentive pay programs.

Learning from the Test: Raising Selective College Enrollment by Providing Information

In the last decade, five U.S. states adopted mandates requiring high school juniors to take a college entrance exam. In the two earliest-adopting states, nearly half of all students were induced into testing, and 40-45% of them earned scores high enough to qualify for selective schools. Selective college enrollment rose by 20% following implementation of the mandates, with no effect on overall attendance. I conclude that a large number of high-ability students appear to dramatically underestimate their candidacy for selective colleges. Policies aimed at reducing this information shortage are likely to increase human capital investment for a substantial number of students.

The Effect of Shocks to College Revenues on For-Profit Enrollment: Spillover from the Public Sector

Between 2000 and 2010, U.S. public postsecondary schools experienced widespread and uneven changes in funding from state and local appropriations. We estimate that statewide funding cuts lead to a decrease in public attendance that is offset by an increase in for-profit attendance, with no change in overall enrollment rates. We document a corresponding increase in borrowing, driven by both a shift in attendance toward a higher-borrowing sector and public institutions price adjusting to offset losses in revenue. Finally, we examine potential channels underlying these results and detect meaningful changes in public universities’ tuition, faculty, and competitive admissions slots.

Where Credit is Due: The Relationship between Family Background and Credit Health

Using a novel dataset that links an individual’s background, education, and federal financial aid participation to her future credit records, we document that, even though it is not, and cannot be, used by credit agencies in assigning risk, family background is a strong predictor of early-career credit health (that is, an individual’s credit score when she is around 30 years old). This relationship persists even after controlling for achievement, a range of postsecondary schooling variables (e.g., educational attainment, institutional quality, undergraduate borrowing), and key elements of early credit histories (e.g., default on educational loans). Interestingly, undergraduate borrowing, which is not underwritten, correlates with background and appears to explain some of the difference in scores. In light of the many important contexts in which credit scores are relied upon to evaluate consumers (e.g., lending, insurance, employment), our study offers a new dimension in understanding the transmission of socioeconomic status across generations.

On Intergenerational Immobility : Evidence that Adult Credit Health Reflects the Childhood Environment

Using a novel dataset that links socioeconomic background to future credit, postsecondary education, and federal student loan and grant records, we document that, even though it is not and cannot be used by credit agencies in assigning risk, background is a strong predictor of adult credit health. A relationship remains upon inclusion of achievement, attainment, and debt management metrics. These findings reveal a new dimension along which childhood circumstances persist into adulthood and imply that the many important contexts in which credit scores are relied upon to evaluate individuals (e.g., lending, insurance, employment) may be helping to preserve inherited inequities.

The Role of State and Local Budget Cuts in the Run-Up of For-Profit Attendance and Student Borrowing: Spillovers between the Public and For-Profit Sectors

Between 2000 and 2010, U.S. public postsecondary schools experienced widespread decreases in appropriations funding. We document that every 10 percent cut in appropriations statewide increased for-profit attendance by 2 percent, owing to students who otherwise would have attended public institutions. We hypothesize that public institutions price adjusted in response to funding cuts which, together with a shift in attendance toward a higher-borrowing sector, induced greater reliance on debt financing among students. We estimate a corresponding increase in annual borrowing of 0.7 percent, driven by for-profit borrowers. Finally, we detect meaningful changes in public universities’ tuition, faculty, and competitive admissions slots.