South Carolina has been experimenting with a school incentive system since 1984. This article analyses trends in student achievement and student and teacher attendance - outcomes rewarded by the program. It also compares performance and gain score outcomes, evaluates the banding system and examines the distributional consequences of alternative incentive designs. The authors find modest improvements in student achievement and no significant improvements in attendance patterns for students or teachers. Grouping schools into SES bands to compete for incentive awards has important distributional and policy implications. Most importantly, using school gain scores and SES bands together effectively eliminates the impact of SES on the distribution of incentive rewards.
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