The Volokh Conspiracy - Paying for Performance - The Economics of Student Achievement:

Harvard economist Roland Fryer is undertaking an impressive experiment in education reform: paying students for performance. According to Scientific American:

Can educators find ways to encourage students to engage in the kind of effortful study that will improve their reading and math skills? Roland G. Fryer, Jr., an economist at Harvard University, has experimented with offering monetary rewards to motivate students in underperforming schools in New York City and Dallas. In one ongoing program in New York, for example, teachers test the students every three weeks and award small amounts--on the order of $10 or $20--to those who score well. The early results have been promising.

As Fryer explained back in 2004, "for years white parents have been giving their kids money for As, now we are trying the same system for black kids." He also notes that preliminary findings show that no other change in education policy increases student test scores so much per dollar invested.

Financial incentives for students are a possible solution to a crucial problem in education: students must be motivated to do the work despite their generally short time horizons. Most of the benefits of a good education won't accrue to children until years after the fact. Yet children and teenagers have notoriously short time horizons and many are unwilling to work hard today for rewards that they can't enjoy until many years later. Fryer's financial incentives represent one possible way to give students more immediate rewards for studying hard. As he points out, middle and upper class parents have often used such rewards for studying for their own children, so the idea is not completely novel.

Like Fryer (see link below), I have a special personal interest in this subject. Similar to him (but with much less excuse) I was a terrible student for much of my school career. Although I knew that good grades were important for getting into college, this was too distant a reward to motivate me very much. What turned my situation around was high school debate. If I worked hard on a debate topic for 2 or 3 weeks, I could win a prize at a tournament at the end of that time. And I could go to as many as 10 or 12 tournaments each academic year, which meant getting as many as 10 or 12 prizes, and (more importantly) the prestige that went with them. Although tournament trophies (like Fryer's $10 cash prizes) are trivial in value compared to the long-term benefits of education, they were an immediate reward that provided quick gratification to my teenage mind. Over time, learning to work hard on debate issues also led me to study harder in other classes.

It would be wrong to generalize from my potentially atypical experience. But if Fryer's experiment continues to produce good results, it might more generally validate the theory that paying for performance works in education as well as in other areas of life.

Obviously, it might be better if students loved learning for its own sake or if they were willing to work hard just for long-term rewards. Unfortunately, however, much of what students need to learn in school is not likely to be interesting to all students, and I highly doubt that we can persuade the average child or teenager to radically alter their short term orientation.

For more information on Fryer and his research, see here.

NOTE to GMU students: To head off the inevitable question - no I won't be instituting this policy in my law school classes. I hope that by the time students get to GMU Law, they have longer time horizons than I did when I was in high school!

	[Ilya Somin, September 1, 2006 at 12:18am] Trackbacks Paying for Performance - The Economics of Student Achievement: Harvard economist Roland Fryer is undertaking an impressive experiment in education reform: paying students for performance. According to Scientific American: Can educators find ways to encourage students to engage in the kind of effortful study that will improve their reading and math skills? Roland G. Fryer, Jr., an economist at Harvard University, has experimented with offering monetary rewards to motivate students in underperforming schools in New York City and Dallas. In one ongoing program in New York, for example, teachers test the students every three weeks and award small amounts--on the order of $10 or $20--to those who score well. The early results have been promising. As Fryer explained back in 2004, "for years white parents have been giving their kids money for As, now we are trying the same system for black kids." He also notes that preliminary findings show that no other change in education policy increases student test scores so much per dollar invested. Financial incentives for students are a possible solution to a crucial problem in education: students must be motivated to do the work despite their generally short time horizons. Most of the benefits of a good education won't accrue to children until years after the fact. Yet children and teenagers have notoriously short time horizons and many are unwilling to work hard today for rewards that they can't enjoy until many years later. Fryer's financial incentives represent one possible way to give students more immediate rewards for studying hard. As he points out, middle and upper class parents have often used such rewards for studying for their own children, so the idea is not completely novel. Like Fryer (see link below), I have a special personal interest in this subject. Similar to him (but with much less excuse) I was a terrible student for much of my school career. Although I knew that good grades were important for getting into college, this was too distant a reward to motivate me very much. What turned my situation around was high school debate. If I worked hard on a debate topic for 2 or 3 weeks, I could win a prize at a tournament at the end of that time. And I could go to as many as 10 or 12 tournaments each academic year, which meant getting as many as 10 or 12 prizes, and (more importantly) the prestige that went with them. Although tournament trophies (like Fryer's $10 cash prizes) are trivial in value compared to the long-term benefits of education, they were an immediate reward that provided quick gratification to my teenage mind. Over time, learning to work hard on debate issues also led me to study harder in other classes. It would be wrong to generalize from my potentially atypical experience. But if Fryer's experiment continues to produce good results, it might more generally validate the theory that paying for performance works in education as well as in other areas of life. Obviously, it might be better if students loved learning for its own sake or if they were willing to work hard just for long-term rewards. Unfortunately, however, much of what students need to learn in school is not likely to be interesting to all students, and I highly doubt that we can persuade the average child or teenager to radically alter their short term orientation. For more information on Fryer and his research, see here. NOTE to GMU students: To head off the inevitable question - no I won't be instituting this policy in my law school classes. I hope that by the time students get to GMU Law, they have longer time horizons than I did when I was in high school!