Working Paper: NBER ID: w19351
Authors: Lisa Barrow; Cecilia E. Rouse
Abstract: Using survey data from a field experiment in the U.S., we test whether and how financial incentives change student behavior. We find that providing post-secondary scholarships with incentives to meet performance, enrollment, and/or attendance benchmarks induced students to devote more time to educational activities and to increase the quality of effort toward, and engagement with, their studies; students also allocated less time to other activities such as work and leisure. While the incentives did not generate impacts after eligibility had ended, they also did not decrease students' inherent interest or enjoyment in learning. Finally, we present evidence suggesting that students were motivated more by the incentives provided than simply the effect of giving additional money, and that students who were arguably less time-constrained were more responsive to the incentives as were those who were plausibly more myopic. Overall these results indicate that well-designed incentives can induce post-secondary students to increase investments in educational attainment.
Keywords: financial incentives; educational investment; performance-based scholarships; student time use
JEL Codes: D03; I2; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Performance-Based Scholarships (PBS) (D29) | Time Allocation to Educational Activities (I21) |
| Performance-Based Scholarships (PBS) (D29) | Time Allocation to Non-Educational Activities (J29) |
| Performance-Based Scholarships (PBS) (D29) | Engagement and Quality of Effort in Studies (I21) |
| Time Constraints and Myopia (C41) | Response to Performance-Based Scholarships (PBS) (D29) |
| Incentive Structure (M52) | Investment in Education (I26) |