Incentives Help with Student Perfomance

news story by Nancy Swanson | June 23, 2012

Related Topics: student performance, Freakonomics, Chicago, financial incentives

A recent study conducted by the author of the book Freakonomics shows that students attending low-performing schools were more likely to perform better on tests when offered financial or non-financial incentives.

“Both financial and non-financial incentives can serve as useful tools to increase student effort and motivation on otherwise low-stakes assessment tests,” the authors, Steven D. Levitt, John A. List, Susanne Neckermann, and Sally Sado wrote.

The authors performed randomized experiments on 6,500 students from low-performing students in Chicago from 2009 to 2011 in three settings that differ in terms of size, age and subjects being tested. The groups were offered the following rewards: financial low ($10 cash), financial high ($20 cash) or non-financial (trophies).

They found that the low financial incentives of $10 worked in one of the settings, but higher incentives of $20 worked in two out of the three settings. Additionally, they found the non-monetary incentives, trophies, to be effective for younger children, but not for high school and junior high students.

One of the more significant findings was the effectiveness of immediate reward as opposed to delayed reward.

“We find that all motivating power vanishes, when we implement the same rewards in a delayed version in which we tell students that they will receive their reward one month after the test, rather than immediately,” the authors wrote.

This poses a problem, as incentives in these settings are almost always delayed, as teachers, administrators and districts often do not have the means to provide immediate reward to students.

At the same time, another problem can be that the motivations for performance are often much stronger for teachers and administrators than for students.

“The trouble for many schools is that the incentive structure is set up so that teachers focus more than their students on standardized tests,” Derek Thompson wrote for The Atlantic. “These tests are super-high-stakes for instructors and principals, where they can determine who keeps a job and where state resources are spent. But they are relatively low-stakes for individual students in the short-term, especially if those students aren't looking to go to college and don't care very much about a weak grade.”

While the authors conclude that financial and non-financial incentives are an effective source of motivation, they readily admit that the study does not examine any long-term effects on how it will affect the student.

“This analysis is only a first step and says nothing about the long-term consequences of using such rewards,” the authors wrote. “In future work we plan to address potential long-term consequences of rewards and spillover effects over subjects and time.”

Nancy Swanson is a writer for 360 Education Solutions