Working Paper: NBER ID: w15898
Authors: Roland G. Fryer Jr.
Abstract: This paper describes a series of school-based randomized trials in over 250 urban schools designed to test the impact of financial incentives on student achievement. In stark contrast to simple economic models, our results suggest that student incentives increase achievement when the rewards are given for inputs to the educational production function, but incentives tied to output are not effective. Relative to popular education reforms of the past few decades, student incentives based on inputs produce similar gains in achievement at lower costs. Qualitative data suggest that incentives for inputs may be more effective because students do not know the educational production function, and thus have little clue how to turn their excitement about rewards into achievement. Several other models, including lack of self-control, complementary inputs in production, or the unpredictability of outputs, are also consistent with the experimental data.
Keywords: student achievement; financial incentives; randomized trials
JEL Codes: I20; J15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Lack of understanding of the educational production function (D29) | Differential effects of input versus output incentives (J33) |
| Financial incentives for inputs (e.g., reading books) (J33) | Student achievement (I24) |
| Incentives tied to outputs (e.g., standardized test scores) (J33) | Student achievement (I24) |
| Incentives for behavior and attendance (M52) | Student achievement (I24) |