Teaching in the Lab: Financial Incentives in the Education Process

Abstract:     
This study uses a laboratory experiment to analyze the effectiveness of performance based monetary incentives in the teaching process. The process of knowledge transmission is recreated using a video-stream. Four different teacher payment schemes are compared, three of which depend on the student‘s success. Furthermore, the experiment is done with two different subject pools: prospective teachers and regular students. Results indicate that prospective teachers do not react to monetary incentives in the given task. However, regular students do react in the expected way: Teachers transmit a significantly higher share of their knowledge when paid according to student performance.

Number of Pages in PDF File: 27

Keywords: education, monetary incentives, video analysis

JEL Classification: C91, D03, I21, J33

working papers series