This article examines the effectiveness of financial incentives and monitoring in reducing teacher absenteeism and improving learning outcomes in rural India. The study, conducted by Esther Duflo, Rema Hanna, and Stephen Ryan, uses a randomized experiment and a structural model to test the impact of these incentives on teacher attendance and student performance. In the treatment schools, teachers' attendance was monitored daily using cameras, and their salaries were linked to attendance through a nonlinear function. The results show that teacher absenteeism decreased by 21 percentage points compared to the control group, and children's test scores increased by 0.17 standard deviations. The authors estimate a dynamic labor supply model and find that teachers strongly responded to the financial incentives, which alone explains the difference between the two groups. The model is used to compute cost-minimizing compensation policies. The study also addresses the potential issues of multitasking and demoralization, finding no evidence of these problems. The findings suggest that financial incentives can effectively improve teacher attendance and educational outcomes in rural areas.This article examines the effectiveness of financial incentives and monitoring in reducing teacher absenteeism and improving learning outcomes in rural India. The study, conducted by Esther Duflo, Rema Hanna, and Stephen Ryan, uses a randomized experiment and a structural model to test the impact of these incentives on teacher attendance and student performance. In the treatment schools, teachers' attendance was monitored daily using cameras, and their salaries were linked to attendance through a nonlinear function. The results show that teacher absenteeism decreased by 21 percentage points compared to the control group, and children's test scores increased by 0.17 standard deviations. The authors estimate a dynamic labor supply model and find that teachers strongly responded to the financial incentives, which alone explains the difference between the two groups. The model is used to compute cost-minimizing compensation policies. The study also addresses the potential issues of multitasking and demoralization, finding no evidence of these problems. The findings suggest that financial incentives can effectively improve teacher attendance and educational outcomes in rural areas.