What if banks paid higher interest on checking accounts than savings accounts? Would the savings rate decline? You bet. Incentives alter outcomes, sometimes in unintended ways. This is what happens today when we evaluate high schools, basing everything on test scores. Test scores become the incentive, but perversely they also become a disincentive. How do we select "principals of the year" across the country? Nowhere do the criteria consider high school graduation rates. Test scores literally mean everything. Kids who drop out don't count. Here's how it works: If high school principals accept that half of ninth-graders won't graduate from 12th grade, the schools' average test scores will...
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