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Conditional cash penalties in education: Evidence from the Learnfare experiment

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  • Dee, Thomas S.

Abstract

Wisconsin's influential Learnfare initiative is a conditional cash penalty program that sanctions a family's welfare grant when covered teens fail to meet school attendance targets. In the presence of reference-dependent preferences, Learnfare provides uniquely powerful financial incentives for student performance. However, a 10-county random-assignment evaluation suggested that Learnfare had no sustained effects on school enrollment and attendance. This study evaluates the data from this randomized field experiment. In Milwaukee County, the Learnfare procedures were poorly implemented and the random-assignment process failed to produce balanced baseline traits. However, in the nine remaining counties, Learnfare increased school enrollment by 3.5 percent (effect size = 0.08) and attendance by 4.5 percent (effect size = 0.10). These results suggest that well-designed financial incentives may be an effective mechanism for improving the school persistence of at-risk students at scale.

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Bibliographic Info

Article provided by Elsevier in its journal Economics of Education Review.

Volume (Year): 30 (2011)
Issue (Month): 5 (October)
Pages: 924-937

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Handle: RePEc:eee:ecoedu:v:30:y:2011:i:5:p:924-937

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Web page: http://www.elsevier.com/locate/econedurev

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Keywords: Education Welfare Incentives Attainment Experiment;

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References

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  1. Roland G. Fryer, Jr, 2010. "Financial Incentives and Student Achievement: Evidence from Randomized Trials," NBER Working Papers 15898, National Bureau of Economic Research, Inc.
  2. Alan Krueger, 1997. "Experimental Estimates of Education Production Functions," Working Papers 758, Princeton University, Department of Economics, Industrial Relations Section..
  3. Angrist, Joshua & Lang, Daniel W. & Oreopoulos, Philip, 2007. "Incentives and Services for College Achievement: Evidence from a Randomized Trial," IZA Discussion Papers 3134, Institute for the Study of Labor (IZA).
  4. Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
  5. Thomas S. Dee, 2001. "Teachers, Race and Student Achievement in a Randomized Experiment," NBER Working Papers 8432, National Bureau of Economic Research, Inc.
  6. Kremer, Michael & Miguel, Edward & Thornton, Rebecca & Ozier, Owen, 2005. "Incentives to learn," Policy Research Working Paper Series 3546, The World Bank.
  7. Skoufias, Emmanuel & McClafferty, Bonnie, 2001. "Is PROGRESA working?," FCND discussion papers 118, International Food Policy Research Institute (IFPRI).
  8. Card, David, 2001. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," Econometrica, Econometric Society, vol. 69(5), pages 1127-60, September.
  9. Michael Wiseman, 1996. "State strategies for welfare reform: The Wisconsin story," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 15(4), pages 515-546.
  10. Camerer, Colin F & Hogarth, Robin M, 1999. "The Effects of Financial Incentives in Experiments: A Review and Capital-Labor-Production Framework," Journal of Risk and Uncertainty, Springer, vol. 19(1-3), pages 7-42, December.
  11. Sudhanshu Handa & Benjamin Davis, 2006. "The Experience of Conditional Cash Transfers in Latin America and the Caribbean," Development Policy Review, Overseas Development Institute, vol. 24(5), pages 513-536, 09.
  12. Roland Bénabou & Jean Tirole, 2003. "Intrinsic and Extrinsic Motivation," Review of Economic Studies, Oxford University Press, vol. 70(3), pages 489-520.
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Citations

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Cited by:
  1. Roland G. Fryer, Jr, 2010. "Racial Inequality in the 21st Century: The Declining Significance of Discrimination," NBER Working Papers 16256, National Bureau of Economic Research, Inc.
  2. Åslund, Olof & Engdahl, Mattias, 2012. "The value of earning for learning: Performance bonuses in immigrant language training," Working Paper Series 2013:2, Uppsala University, Department of Economics.
  3. Barua, Rashmi & Vidal-Fernández, Marian, 2012. "No Pass No Drive: Education and Allocation of Time," IZA Discussion Papers 6464, Institute for the Study of Labor (IZA).
  4. Joshua Angrist & Philip Oreopoulos & Tyler Williams, 2010. "When Opportunity Knocks, Who Answers? New Evidence on College Achievement Awards," NBER Working Papers 16643, National Bureau of Economic Research, Inc.
  5. Philip J. Cook & Jens Ludwig, 2010. "Economical Crime Control," NBER Working Papers 16513, National Bureau of Economic Research, Inc.
  6. Robert Metcalfe & Simon Burgess and Steven Proud, 2011. "Student effort and educational attainment: Using the England football team to identify the education production function," Economics Series Working Papers 586, University of Oxford, Department of Economics.
  7. Gisselquist, Rachel M. & Nino-Zarazua, Miguel, 2013. "What can experiments tell us about how to improve governance?," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  8. Márton Medgyesi & Temesváry, Z., 2013. "GINI DP 84: Conditional cash transfers in high- income OECD countries and their effects on human capital accumulation," GINI Discussion Papers 84, AIAS, Amsterdam Institute for Advanced Labour Studies.

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