RT Journal Article SR Electronic T1 Performance Information and Personnel Decisions in the Public Sector: The Case of School Principals JF Journal of Human Resources JO J Hum Resour FD University of Wisconsin Press SP 0619-10272R1 DO 10.3368/jhr.0619-10272R1 A1 Julie Berry Cullen A1 Eric A. Hanushek A1 Gregory Phelan A1 Steven G. Rivkin YR 2021 UL http://jhr.uwpress.org/content/early/2021/10/07/jhr.0619-10272R1.abstract AB In many settings, leaders are evaluated in contexts where complexities of production processes and conflicting pressures from interest groups pose challenges to performance evaluation. In education, school accountability systems assemble rich data and report both categorical rating and the underlying student pass rates that determine it, permitting direct investigation of how different information affects labor market outcomes of school leaders. Applying regression discontinuity methods that by design hold effectiveness constant, we find sizable positive impacts on Texas elementary school principal retention and salaries for crossing the unacceptable-acceptable boundary but not for crossing higher ratings cutoffs. The apparent information breakdown that leads to the unequal treatment of equals at the lowest boundary could raise the distribution of principal quality through disproportionate departures of less effective school leaders. However, there is substantial overlap in principal value-added distributions across rating categories, and failure to cross the acceptable threshold does not lead to future improvements in school performance. Supplementary analysis suggests that the labor market penalty to leading a school that receives the lowest rating is confined to the current district, where the stigma of a low rating is likely to be greatest.