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The Performance of Performance Standards

James J. Heckman, Carolyn Heinrich and Jeffrey Smith
The Journal of Human Resources
Vol. 37, No. 4 (Autumn, 2002), pp. 778-811
DOI: 10.2307/3069617
Stable URL: http://www.jstor.org/stable/3069617
Page Count: 34
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The Performance of Performance Standards
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Abstract

This paper examines the performance of the JTPA performance system, a widely emulated model for inducing efficiency in government organizations. We present a model of how performance incentives may distort bureaucratic decisions. We define cream skimming within the model. Two major empirical findings are (a) that the short-run measures used to monitor performance are weakly, and sometimes perversely, related to long-run impacts and (b) that the efficiency gains or losses from cream skimming are small. We find evidence that centers respond to performance standards.

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