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Monetary Incentives And Student Achievement In A Depressed Labour Market: Results From A Randomized Experiment

  • Maria De Paola


  • Vincenzo Scoppa


  • Rosanna Nisticò


    (Dipartimento di Economia e Statistica, Università della Calabria)

In this paper we carry out an evaluation of the effectiveness of monetary incentives in enhancing student performance using a randomized experiment involving undergraduate students enrolled at a Southern Italian University. Students participating at the experiment were assigned to three different groups: a high reward group, a low reward group and a control group. Rewards were assigned following a tournament rule to the 30 best performing students in each treated group. Findings suggest that financial rewards increase student performance both in terms of number of credits earned and grades obtained at exams. High ability students react strongly while the effect is null for low ability students. When the “intention-to-treat” effects are adjusted for non-participation using IV, it emerges a stronger impact of the treatment on student performance.

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Paper provided by Università della Calabria, Dipartimento di Economia, Statistica e Finanza (Ex Dipartimento di Economia e Statistica) in its series Working Papers with number 201006.

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Length: 21 pages
Date of creation: Apr 2010
Date of revision:
Handle: RePEc:clb:wpaper:201006
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Università della Calabria, Dipartimento di Economia, Statistica e Finanza, Ponte Pietro Bucci, Cubo 0/C, I-87036 Arcavacata di Rende, CS, Italy

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  1. Michael Kremer & Edward Miguel & Rebecca Thornton, 2009. "Incentives to Learn," The Review of Economics and Statistics, MIT Press, vol. 91(3), pages 437-456, August.
  2. Angrist, Joshua & Lavy, Victor, 2002. "The Effect of High School Matriculation Awards: Evidence from Randomized Trials," CEPR Discussion Papers 3827, C.E.P.R. Discussion Papers.
  3. Todd R. Stinebrickner & Ralph Stinebrickner, 2007. "The Causal Effect of Studying on Academic Performance," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 20072, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
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  5. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
  6. Luigi Pistaferri, 1999. "Informal Networks in the Italian Labor Market," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 58(3-4), pages 355-375, December.
  7. Joshua Angrist & Eric Bettinger & Michael Kremer, 2006. "Long-Term Educational Consequences of Secondary School Vouchers: Evidence from Administrative Records in Colombia," American Economic Review, American Economic Association, vol. 96(3), pages 847-862, June.
  8. Joshua Angrist & Eric Bettinger & Erik Bloom & Elizabeth King & Michael Kremer, 2002. "Vouchers for Private Schooling in Colombia: Evidence from a Randomized Natural Experiment," American Economic Review, American Economic Association, vol. 92(5), pages 1535-1558, December.
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  12. 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.
  13. Roland G. Fryer, 2011. "Teacher Incentives and Student Achievement: Evidence from New York City Public Schools," NBER Working Papers 16850, National Bureau of Economic Research, Inc.
  14. Oriana Bandiera & Valentino Larcinese & Imran Rasul, 2010. "Heterogeneous Class Size Effects: New Evidence from a Panel of University Students," Economic Journal, Royal Economic Society, vol. 120(549), pages 1365-1398, December.
  15. Edwin Leuven & Hessel Oosterbeek & Bas van der Klaauw, 2010. "The Effect of Financial Rewards on Students' Achievement: Evidence from a Randomized Experiment," Journal of the European Economic Association, MIT Press, vol. 8(6), pages 1243-1265, December.
  16. Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March.
  17. Roland G. Fryer, 2011. "Financial Incentives and Student Achievement: Evidence from Randomized Trials," The Quarterly Journal of Economics, Oxford University Press, vol. 126(4), pages 1755-1798.
  18. Christopher M. Cornwell & Kyung Hee Lee & David B. Mustard, 2005. "Student Responses to Merit Scholarship Retention Rules," Journal of Human Resources, University of Wisconsin Press, vol. 40(4), pages 895-917.
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