Georgia offers salary incentives for K-12 educators to obtain post-baccalaureate degrees, intending to improve student performance. In this paper, we evaluate the empirical relationship between advanced degrees earned by teachers and student pass rates on the state high school graduation test. More advanced degrees do not significantly improve pass rates. We conclude the Devil is in the details. It is well known that educational performance is the product of the interaction of many factors, particularly family and socio-economic variables. Previous literature also draws only a weak relationship between teacher quality and salary incentives. Thus, Georgia's experience suggests it is difficult to design effective policy that conditions on indirect incentives to perform. Certain policies may fail because they are ill-conceived, or because interest group pressures interfere in their planning or execution. But sometimes policies fail because there is simply a limit to government's ability to solve problems.
Find article at The Journal of Private Enterprise.