FINANCIAL INCENTIVES AND STUDENT ACHIEVEMENT:EVIDENCE FROM RANDOMIZED TRIALS

This paper describes a series of school-based randomized trials in over 250 urban schools designedto test the impact of financial incentives on student achievement. In stark contrast to simple economicmodels, our results suggest that student incentives increase achievement when the rewards are givenfor inputs to the educational production function, but incentives tied to output are not effective. Relativeto popular education reforms of the past few decades, student incentives based on inputs produce similargains in achievement at lower costs. Qualitative data suggest that incentives for inputs may be moreeffective because students do not know the educational production function, and thus have little cluehow to turn their excitement about rewards into achievement. Several other models, including lackof self-control, complementary inputs in production, or the unpredictability of outputs, are also consistentwith the experimental data....