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Rawlsian versus Utilitarian: Teachers' Incentives and the Distribution of Student Performance

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By using the test score of the least able student in a classroom as the objective function (Rawlsian optimum), this paper examines the implications for teachers' incentives and compares them with the objective that uses the average test score of all the students in a classroom (utilitarian optimum). We show that for certain human-capital production functions and teachers' effort cost functions, the Rawlsian optimum yields at least the same average human capital as the utilitarian optimum, but that the resulting distribution of human capital under the former is more equitable than that under the latter. (JEL: D60, I24, I28, J33)
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Keywords: Rawlsian optimum; equity; social objective; teachers' incentives; tournament; utilitarian optimum

Appeared or available online: 15 January 2018

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