This paper evaluates the effectiveness of a teacher incentive program in rural India, focusing on how monitoring and financial incentives influence teacher attendance and student learning. The study uses a randomized experiment and a structural model to analyze the impact of daily attendance monitoring and a nonlinear salary structure based on attendance. The program, implemented by the NGO Seva Mandir, involved providing teachers with cameras to track attendance and linking their salaries to attendance rates. The results show a significant reduction in teacher absenteeism, with attendance rates dropping from 44% to 21% in treatment schools. Student test scores also increased by 0.17 standard deviations. The study estimates a structural dynamic labor supply model, finding that teachers responded strongly to financial incentives, which alone can explain the difference between treatment and control groups. The model is used to compute cost-minimizing compensation policies. The study also finds no evidence of multitasking by teachers, suggesting that the marginal costs of teaching are low given attendance. Student attendance was similar in both groups, but treatment schools had more instructional days, leading to higher test scores and increased likelihood of transferring to formal schools. The program had long-lasting effects on teacher attendance, with rates still significantly higher in treatment schools after four years. The study concludes that financial incentives are effective in improving teacher attendance and student learning, and that the results have implications for education policy.This paper evaluates the effectiveness of a teacher incentive program in rural India, focusing on how monitoring and financial incentives influence teacher attendance and student learning. The study uses a randomized experiment and a structural model to analyze the impact of daily attendance monitoring and a nonlinear salary structure based on attendance. The program, implemented by the NGO Seva Mandir, involved providing teachers with cameras to track attendance and linking their salaries to attendance rates. The results show a significant reduction in teacher absenteeism, with attendance rates dropping from 44% to 21% in treatment schools. Student test scores also increased by 0.17 standard deviations. The study estimates a structural dynamic labor supply model, finding that teachers responded strongly to financial incentives, which alone can explain the difference between treatment and control groups. The model is used to compute cost-minimizing compensation policies. The study also finds no evidence of multitasking by teachers, suggesting that the marginal costs of teaching are low given attendance. Student attendance was similar in both groups, but treatment schools had more instructional days, leading to higher test scores and increased likelihood of transferring to formal schools. The program had long-lasting effects on teacher attendance, with rates still significantly higher in treatment schools after four years. The study concludes that financial incentives are effective in improving teacher attendance and student learning, and that the results have implications for education policy.