Financial incentives and educational investment: the impact of performance-based scholarships on student time use
AbstractUsing survey data from a field experiment in the U.S., we test whether and how financial incentives change student behavior. We find that providing post-secondary scholarships with incentives to meet performance, enrollment, and/or attendance benchmarks induced students to devote more time to educational activities and to increase the quality of effort toward, and engagement with, their studies; students also allocated less time to other activities such as work and leisure. While the incentives did not generate impacts after eligibility had ended, they also did not decrease students’ inherent interest or enjoyment in learning. Finally, we present evidence suggesting that students were motivated more by the incentives provided than simply the effect of giving additional money, and that students who were arguably less time-constrained were more responsive to the incentives as were those who were plausibly more myopic. Overall these results indicate that well-designed incentives can induce post-secondary students to increase investments in educational attainment.
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Bibliographic InfoPaper provided by Federal Reserve Bank of Chicago in its series Working Paper Series with number WP-2013-07.
Date of creation: 2013
Date of revision:
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Other versions of this item:
- Lisa Barrow & Cecilia E. Rouse, 2013. "Financial Incentives and Educational Investment: The Impact of Performance-Based Scholarships on Student Time Use," NBER Working Papers 19351, National Bureau of Economic Research, Inc.
- D03 - Microeconomics - - General - - - Behavioral Microeconomics; Underlying Principles
- I2 - Health, Education, and Welfare - - Education
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-08-31 (All new papers)
- NEP-CBE-2013-08-31 (Cognitive & Behavioural Economics)
- NEP-EDU-2013-08-31 (Education)
- NEP-EXP-2013-08-31 (Experimental Economics)
- NEP-HRM-2013-08-31 (Human Capital & Human Resource Management)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- David Deming & Susan Dynarski, 2009. "Into College, Out of Poverty? Policies to Increase the Postsecondary Attainment of the Poor," NBER Working Papers 15387, National Bureau of Economic Research, Inc.
- 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).
- Philip Oreopoulos & Daniel Lang & Joshua Angrist, 2009. "Incentives and Services for College Achievement: Evidence from a Randomized Trial," American Economic Journal: Applied Economics, American Economic Association, vol. 1(1), pages 136-63, January.
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