Financial Incentives and Student Achievement: Evidence from Randomized Trials

91 Pages Posted: 12 Apr 2010  

Roland G. Fryer Jr.

Harvard University - Department of Economics; National Bureau of Economic Research (NBER); American Bar Foundation; University of Chicago

Date Written: April 2010

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.

Suggested Citation

Fryer, Roland G., Financial Incentives and Student Achievement: Evidence from Randomized Trials (April 2010). NBER Working Paper No. w15898. Available at SSRN: https://ssrn.com/abstract=1587225

Roland G. Fryer Jr. (Contact Author)

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
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American Bar Foundation

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Chicago, IL 60611
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University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

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