Making the hidden visible: A cost analysis of Teacher Incentive Fund (TIF)-supported educator incentive projects

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While educator incentive plans are not new, they have gained traction in the current education policy landscape. Perhaps one contributor to their resurgence has been the Teacher Incentive Fund (TIF), which has awarded nearly $2.5 billion to 131 recipients since 2006. Despite the popularity of educator incentive programs, we know little about the opportunity costs associated with implementing these reforms. This study provides information about the costs associated with implementing TIF-supported educator incentive projects in three public school districts. In this study, I use data from documents as well as individual and focus group interviews to perform a resource-cost analysis of the implementation of the three incentive projects. I rely on the "ingredients" method (Levin & McEwan, 2001) to identify the full range of resources required to implement these projects for one academic year (2012-13). I determine the opportunity costs associated with these resources, and I detail the extent to which the districts that implemented the incentive projects were able to rely on TIF funds to support the implementation. I also investigate whether or not the incentive projects were associated with what Rice and Malen (2003) refer to as "human costs" of educational reform. I find that the opportunity costs associated with implementing the educator incentive projects were high: estimated one-year operating costs were over $1 million in all three sites, and implementation of the costliest project required resources valued at over $6 million. These costs were considerably higher than expenditures, which illuminates the presence of "hidden" opportunity costs that do not show up on budgets or performance reports but exist nonetheless. For all three projects included in the study, TIF covered almost all fiscal outlays related to project implementation, but it did not cover all opportunity costs. Finally, I find that investing time and effort in project implementation did impose human costs on some project participants. In highlighting the range of resources required to implement these incentive plans and calculating the opportunity costs associated with those resources, this study adds to the literature on educator incentives, the literature on cost analysis, and the policy debate surrounding educator incentives.