Education

Calling Out Cash Incentives

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Science  23 Dec 2011:
Vol. 334, Issue 6063, pp. 1605
DOI: 10.1126/science.334.6063.1605-a

The English writer Hazlitt claimed “Learning is its own exceeding great reward.” Economists argue that increased lifetime earnings are a more powerful prize for the educated. Kindergarten teachers know the motivational magic of a simple “Good job!” Whatever their form, rewards and education go hand in hand. Fryer examined whether direct financial payments could improve outcomes in low-performing urban schools. Randomized 2-year trials included roughly 27,000 students in 203 public schools located in three cities. Dallas 2nd-graders received $2 per book read, New York City 4th- and 7th-graders earned up to $50 for performance on certain tests, and Chicago 9th-graders earned up to $50 for class grades. $9.4 million was distributed, with impacts measured on city-specific achievement tests. English-speaking students in Dallas improved, whereas English-language learners were hindered, relative to controls. Rewarding the reading of English-language books may have “crowded out” academic Spanish, hindering low-performing Spanish-speakers being provided with intense Spanish remediation. Other than this subsample, the overall impact of incentives was statistically zero. However, Fryer noted that the study was not designed to detect small-to-modest effect sizes, and the 95% confidence intervals contained effect sizes that could still return up to 5% on investment. Rewarding “inputs” to learning (such as reading books) may be better than focusing on “outputs” (such as test scores), because students may not know how best to translate efforts into outcomes.

Q. J. Econ. 126, 1755 (2011).

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