Monday, July 02, 2007

How about paying kids to study?

Here's a very interesting experiment:

New York City has decided to offer cash rewards to some students based on their attendance records and exam performance. Diligent, high-achieving seventh graders will be able to earn up to $500 in a year. The plan is the brainchild of Roland G. Fryer, an economist who has been appointed as “chief equality officer” of the city’s Department of Education.

In this NYTimes column Barry Schwartz, psychologist and author of The Paradox of Choice, points out some of the pitfalls in this approach. First, he highlights the key assumption behind this experiment:

The logic of the plan reveals a second assumption that economists make: the more motives the better. Give people two reasons to do something, the thinking goes, and they will be more likely to do it, and they’ll do it better, than if they have only one.

But, but ...

Unfortunately, these assumptions that economists make about human motivation, though intuitive and straightforward, are false. In particular, the idea that adding motives always helps is false. There are circumstances in which adding an incentive competes with other motives and diminishes their impact.

He goes on to cite some very interesting -- and rather counter-intuitive (at least to me) -- evidence from psychological research. As they say, read the whole thing.


  1. Tabula Rasa said...

    yup, it's all about intrinsic versus extrinsic motivation. check out the fascinating work done by deci and ryan.

  2. Anonymous said...

    I find it disingenuous to give the criticism of a program without also giving the case for it. Of course, only to be expected - almost all your postings about economics have been about how the subject has a "flawed" model of human behavior. I can't think of anything else about economics that you have posted. You are, of course, more than entitled to your obsessions.

    Anyway, the issue is hardly as simple as the NYT article makes it out to be. Some googling gives some insights into the issue. Check out the analysis by Anita Allen, herself no admirer of the "experiment" at:

    Some relevant excerpts from the article about Fryer and the background to the program:

    First, the problem:

    "School districts are struggling with what has become known as "the achievement gap." African- American first-graders fall behind white counterparts and never catch up. Hispanic kids under-perform compared to white kids, too."

    The obvious question is: why? And as usual in social sciences, there may be more than one reason. Fryer identified one unsuspected reason and the cash-for-studies program comes out of that research:

    "Fryer is a 30-year-old Harvard economics professor best known for research on "acting white." Fryer believes cash incentives could motivate lukewarm parents to make education a priority. How will cash incentives motivate students? Fryer has argued that some under-achievement by minority kids may be explained by the poor quality of their schools. But another factor, he believes, is that minority kids are punished by their peers for "acting white" -- attending to their studies and achieving. Whereas today kids don't take school seriously because they don't want to lose friends, the introduction of money into the picture will give them all a reason to study for tests and do homework."

    If I had to guess, it is this aspect - the tendency of some [many?] black kids to neglect their studies for fear of being seen to "act white" - that the cash program is aimed to address. Nothing else. Economists, in general, and most certainly Fryer himself would hardly come up with a generalised cash-for-studies program aimed at all students. Contrary to what Professor Schwartz believes, economists are not that naive - though, like all, they do have their blindspots.

    Btw, Fryer himself is African-American, an upcoming star in the profession and an amazing person himself. Apparently, a couple of years ago when he was on the job market as a newly minted Ph.D., he was frightened that someone would "google" his name and get a link to his father who also bears the same name. His father, incidentally is in prison convicted of some fairly serious crime.

    You can find out more about Fryer's work at his Harvard web page:


  3. Blue said...

    See, this is where I wish I were a seventh grader in NYC right about now... I would be raking it in.

    Sure, there will be the kids for whom the addition of money into the equation will diminish their "enthusiasm" for learning itself, but... but... but what about all the really happy nerds? Why is no one mentioning how happy they will be? ^__^

    (Or, perhaps, on a more sociological level, how the popularity structure of the classroom might change if it were revealed who was making the most money, as opposed to who was getting the best grades. High grades seem to correlate to low popularity, but high earners...???)

  4. gaddeswarup said...

    There are some interesting responses from Jared Bernstein and William Polley. The links are in the post "More on the Old Joke About Why Economists Make Forecasts" of

  5. Anonymous said...

    TR: aaargh! You got there before I could. Ok, Ok, you're a hotshot professor and I'm just a grad student but still, can't you leave some crumbs of glory for people lower down on the food chain?


  6. Tabula Rasa said...

    i love you too.