Paying Kids to Be Better Students

School is often boring, and even the best students are difficult to motivate from time to time. In America’s inner city schools – the kinds of places with metal detectors at the doors and drug dealers lurking on the corners – it has proven especially challenging to engage kids and to create a culture where learning is valued.

So after decades of trying to find better teachers, better curricula, and more after school programs all in the name of getting students excited about learning, a few school districts have tried something both audacious and obvious: pay students.

From a rational economic perspective there is a lot of intuitive appeal to paying students. Many students find learning unpleasant, and do not value the standard rewards of hard work such as good grades. But money is appealing to kids, and especially appealing to kids that have limited means to go on spending sprees at the mall with their own money. Find the right price and you might be able to induce kids to learn more, and at less cost than reducing class size or providing incentives to their teachers instead.

But how well does paying students work in practice? And does it have the perverse consequences of crowding out intrinsic student motivation as critics have worried?

In a remarkable research study, Roland Fryer of Harvard partnered with four major urban school districts to conduct randomized experiments on student compensation. The back story of the study is fascinating in its own right and I would highly recommend this article from Time. Here’s the full research paper.

What They Did

In an experiment spanning two school years, a total of 38,000 students were enrolled in the experiment in Chicago, Dallas, New York City, and Washington, DC and were awarded a total of $6.3 million in performance incentives. The experiment aimed to determine not only whether incentives improved performance, but also which kind of incentives work best. In Washington, DC and Dallas students were paid for their inputs — whether they behaved well, attended class, and met other requirements (such as wearing the uniform) in Washington and by the number of books that they read in Dallas. In New York and Chicago students were paid for their output — the types of grades that they received.

What They Found

The results show that paying students for outputs produced virtually no effect on math or reading test scores in comparison to the control group. This finding held true for all grades that were examined (elementary, middle, and high school) and for both boys and girls. The experiment in Dallas, on the other hand, was remarkably successful at improving reading comprehension. Similarly, the experiment in Washington yielded large increases in reading and math achievement. The effect sizes for these intervention ranged from .05 standard deviations increase to around .25 standard deviations (the equivalent of several added months of learning).

An important question is whether the achievement fades out once the incentives are removed (or worse, whether students deteriorate because they lose intrinsic motivation). In Dallas, they found that achievement was lower in the year after the program was phased out, and higher, but not statistically significant from the control group. The program had notable within group differences. For example, Hispanic students benefited the most from the intervention in Dallas, and students with worse attendance and behavior prior to the experiment improved the most in Washington.

The authors summarize their results:


Finding the correct interpretation for our set of experiments is difficult. Much depends on the interpretation of the results from Washington, DC. The leading theory is that students do not understand the educational production function and, thus, lack the know-how to translate their excitement about the incentive structure into measurable output.Students who were paid to read books, attend class, or behave well did not need to know how the vector of potential inputs relates to output, they simply needed to know how to read, make it to class, or sit still long enough to collect their short-term incentive.” (p. 7)

In other words, paying students to produce results makes little difference if the students do not know how to produce the results. Fryer gives the example of students in New York City: although they were very motivated to do well, few had any idea what would help them to get better grades, and none of them thought about studying harder or staying after to meet with the teacher. A related explanation is that students may have a vague idea of how to produce the desired result, but lack the self-control to follow through. Providing incentives and short-term rewards are more likely to boost performance.

The Takeaway

The most resounding criticisms of this project (and Roland Fryer has received death threats) focus on the unintended consequences of paying students. One version of this critique is that paying students erodes their intrinsic motivation to learn. Fryer points out that the results, including the results of a psychometric questionnaire on intrinsic motivation, do not bear out this story. Moreover, few of these students were intrinsically motivated before the study (it’s hard to be motivated when you go to a crumbling school with low expectations).

I agree that the intrinsic motivation story is overblown, and I am not convinced by philosophical critiques that focus on the harmful commodification of achievement (I think you have to be a bit platonistic to think that something is bad if it produces no bad consequences on people’s quality of life). I also believe that paying students and making them intrinsically motivated is not mutually exclusive — the entire theory of positive reinforcement in child development highlights the role that external inducements play in helping children to form the right values and norms. Finally, I like the idea of putting money into students’ pockets (although I understand the worry that it creates pressure in an environment where families earn little money and may become reliant on the student’s income).

My concern is twofold. First, we do not know how to keep students interested with money over the very long haul. Will this model work in a world where all students are always paid from kindergarten through graduate school? Will the novelty fade, and with it the extra boost to performance? Second, we need to be sensitive to how these initiatives may affect children that have learning disabilities and may feel demoralized or humiliated as they fall behind. Paying students for meeting the inputs, instead of the outputs, helps quite a lot in making it feasible for all students to earn some money.

Even if this is not the answer to education’s problems (and Fryer does not claim that it is), it seems like an extremely good step toward changing the culture of inner city schools. At the current price, it’s a bargain too.

About Brendan Saloner


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