Contract Teachers: Experimental Evidence from India. NBER Working Paper No. 19440

The large-scale expansion of primary schooling in developing countries has led to the increasing use of non-civil-service contract teachers who are hired locally by the school, are not professionally trained, have fixed-term renewable contracts, and are paid much lower salaries than regular civil-service teachers. This has been a controversial policy, but there is limited evidence on the effectiveness of contract teachers in improving student learning. We present experimental evidence on the impact of contract teachers using data from an "as is" expansion of contract-teacher hiring across a representative sample of 100 randomly-selected government-run rural primary schools in the Indian state of Andhra Pradesh. At the end of two years, students in schools with an extra contract teacher performed significantly better than those in comparison schools by 0.16s and 0.15s, in math and language tests respectively. Contract teachers were also much less likely to be absent from school than civil-service teachers (18% vs. 27%). Combining the experimental reduction in school-level pupil-teacher ratio (PTR) induced by the provision of an extra contract teacher, with high-quality panel data estimates of the impact of reducing PTR with a regular civil-service teacher, we show that contract teachers are not only effective at improving student learning outcomes, but that they are no less effective at doing so than regular civil-service teachers who are more qualified, better trained, and paid five times higher salaries.