Work

The impact of subjective school ratings on principal compensation and turnover

Year: 2025

Type: article

Abstract: Prior research has established that objective, test-score-based school accountability measures impact school leaders. Subjective evaluations, on the other hand, can provide a more nuanced assessment of school quality. This paper investigates the impact of subjective school inspection ratings on the salary and career outcomes of school principals. Ratings capture not just overall school quality, but also more granular aspects such as leadership quality, teaching and student achievement. Employing a difference-in-differences framework, we find that the overall school inspection rating has substantial impact on principals’ salaries and their rate of exit from public sector schooling. These effects are highly asymmetric: worse ratings have a substantially larger impact compared to rating improvements. Our findings suggest that competition is a key mechanism through which changes in school inspection ratings affect principals. Crucially, by leveraging detailed quality ratings, we show for the first time that the labor market can distinguish between signals concerning overall school quality and those specific to senior management quality.

Source: Journal of Public Economics

DOI: 10.1016/j.jpubeco.2025.105524

Authors: Iftikhar Hussain, Vincenzo Scrutinio, Shqiponja Telhaj

Institutions: University of Sussex, IZA - Institute of Labor Economics, London School of Economics and Political Science, University of Bologna

Language: English

Topic: School Choice and Performance

Subfield: Education

Field: Social Sciences

Domain: Social Sciences

SDGs: Quality education, Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $4,510