This paper studies the effect of unconditional teacher salary increases on teacher and student outcomes. To study the issue, we evaluate the rural hardship allowance in Zambia, which corresponds to a salary increase of 20%. This allowance is allocated to schools on the basis of a distance criterion allowing us to use a regression discontinuity design. We use administrative data from 2004 to 2015 on school and teacher characteristics and on test scores. In addition, we perform a telephone survey of schools close to the eligibility threshold.
Microeconomic Policy: Formulation; Implementation; Evaluation