Financial incentives may reduce teacher absence and improve student performance, but they may also lead teachers and schools to simply exaggerate attendance. Zeitlin and co-authors report on an experiment in Uganda that combined pay-for-performance for teachers with a separate experiment that enlisted local parents to independently monitor teacher absence and report back via mobile phone.
When teachers were paid for attending school, their actual attendance increased, and so did the number of false reports. But the increase in bad information was more than offset by an increase in total information from parental monitoring, providing administrators with a more reliable overall picture of teacher absence. Despite inducing false reports, the results suggest that social welfare was higher with financial incentives.