Blog: The Educated Reporter

When Are Incentives Most Effective for Teachers and Students?

Two recent studies suggest teachers and students respond better to financial incentives when there’s an expectation that their advance rewards must be justified by their final achievement gains.

Last week, EWA’s Emily Richmond summarized an NBER study that gave different cash bonuses and at different times to teachers. The cohort that made the most gains in student test scores was the one that was dealt what arguably would have seemed to be the least enticing option: The $4,000 these teachers received upfront would have to be returned if their students didn’t improve. Meanwhile, the teachers who were promised $8,000—twice as much incentive, theoretically—after the results came in showed little to no improvement in student test scores.

Another NBER paper took a similar tack with students. The pupils who ultimately performed better were the ones given their prizes just before test time and asked to explain what they’d do with their cash or trophy. That study group made statistically significant gains over peers who were promised some keepsake or hard currency provided they did well on tests. Education Week’s Sarah Sparks sums up the outcome:

Researchers found students worked significantly harder to keep what they had than they did to win something new. They outperformed students working to earn cash or a trophy by as much as .17 of a standard deviation. In this context, the improvement was as great an effect as cutting class size by a third or greatly increasing the quality of the teacher, according to the study.

On the surface, the teacher incentive system where the educators had something to lose might seem different than the one that asked students to justify an award for an achievement they had yet to make. But the impulses at play actually might be similar, as one study deals with the economic concept of loss aversion (doing what’s necessary to hold on to what you have) and the other prompts students to engage in a “mental accounting,” as one researcher put it. That same researcher told EdWeek:

“People value something more when they have it already and they are at risk of losing it than when they don’t have it yet and it’s something to gain,” Ms. Sadoff said. “The trophy is something they can hold in their hands; it made it more salient.”

Overall, studies examining cash incentives for students have shown mixed results. Previous research suggests rewarding kids for reading (a type of input incentive) leads to better academic gains than awarding kids prizes for earning good marks (an output incentive). Rewarding teachers with extra money has other positive effects, like retaining teachers longer, but student gains tend not to be affected as a direct result of extra cash, even when considering attendance and GPAs. The incentives may even lead to student academic declines.

Is playing some form of “keep away” with prizes a trend that is likely to catch on in education? Is it a cruel standard or one that should be pursued if the data suggests it’s effective?