Paying kids for performance works after all

Some psychologists argue that it is damaging to pay children for academic performance: Barry Schwartz once attacked a New York schools pilot scheme designed by Roland Fryer with that aim in mind. (If you read to the end of Schwartz’s piece, in which he cites a couple of experiments and hammers economists for their “assumptions”, he does eventually sort-of concede that it might be appropriate to allow Fryer to run another experiment.)

Fryer tells me his results are “coming soon” and “look fascinating so far”. Until then, here’s a new paper from the NBER series:

9.  A Stitch in Time: The Effects of a Novel Incentive-Based High-School Intervention on College Outcomes by C. Kirabo Jackson  -  #15722 (CH ED LS)


I analyze the longer-run effects of a program that pays both 11th and 12th grade students and teachers for passing scores on Advanced Placement exams.  Using a difference-in-differences strategy, I find that affected students attend college in greater numbers, have improved college GPAs, and are more likely to remain in college beyond their freshman year.  Moreover, the program improves college outcomes even for those students who would have enrolled in college without the program.  I also find evidence of increased college graduation for black and Hispanic students groups that tend to underperform in college.  This evidence suggests that relatively late high-school interventions may confer lasting positive and large effects on student achievement in college, and may be effective at improving the educational outcomes of minority students.  The finding of enduring benefits when extrinsic motivators are no longer provided is important in light of concerns that incentive-based-interventions may lead to undesirable practices such as “teaching-to-the-test” and cheating.

This is the opposite of what Schwartz argued might happen. An intriguing follow-up to my recent column on paying for performance.

Tim Harford’s blog

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Tim, also known as the Undercover Economist, writes about the economics of everyday life.