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Do Financial Incentives Crowd Out Intrinsic Motivation to Perform on Standardized Tests?

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  • John List
  • Jeffrey Livingston
  • Susanne Neckermann

Abstract

In the face of worryingly low performance on standardized test, offering students financial incentives linked to academic performance has been proposed as a potentially cost-effective way to support improvement. However, a large literature across disciplines finds that extrinsic incentives, once removed, may crowd out intrinsic motivation on subsequent, similar tasks. We conduct a field experiment where students, parents, and tutors are offered incentives designed to encourage student preparation for a high-stakes state test. The incentives reward performance on a separate low-stakes assessment designed to measure the same skills as the high-stakes test. Performance on the high-stakes test, however, is not incentivized. We find substantial treatment effects on the incented tests but no effect on the non-incented test; if anything, the incentives result in worse performance on the non-incented test. We also find evidence supporting the conclusion that the incentives crowd out intrinsic motivation to perform well on the non-incented test, but this effect is only temporary. One year later, students who had been in the incentives treatments perform better than those in the control on the same non-incented test.

Suggested Citation

  • John List & Jeffrey Livingston & Susanne Neckermann, 2018. "Do Financial Incentives Crowd Out Intrinsic Motivation to Perform on Standardized Tests?," Framed Field Experiments 00643, The Field Experiments Website.
  • Handle: RePEc:feb:framed:00643
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    1. Roland G. Fryer, 2011. "Financial Incentives and Student Achievement: Evidence from Randomized Trials," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(4), pages 1755-1798.
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    5. Steven D. Levitt & John A. List & Susanne Neckermann & Sally Sadoff, 2016. "The Behavioralist Goes to School: Leveraging Behavioral Economics to Improve Educational Performance," American Economic Journal: Economic Policy, American Economic Association, vol. 8(4), pages 183-219, November.
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    8. Derek Neal & Diane Whitmore Schanzenbach, 2010. "Left Behind by Design: Proficiency Counts and Test-Based Accountability," The Review of Economics and Statistics, MIT Press, vol. 92(2), pages 263-283, May.
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    10. Visaria, Sujata & Dehejia, Rajeev & Chao, Melody M. & Mukhopadhyay, Anirban, 2016. "Unintended consequences of rewards for student attendance: Results from a field experiment in Indian classrooms," Economics of Education Review, Elsevier, vol. 54(C), pages 173-184.
    11. Jalava, Nina & Joensen, Juanna Schrøter & Pellas, Elin, 2015. "Grades and rank: Impacts of non-financial incentives on test performance," Journal of Economic Behavior & Organization, Elsevier, vol. 115(C), pages 161-196.
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    Cited by:

    1. Pugatch, Todd & Wilson, Nicholas, 2020. "Nudging Demand for Academic Support Services: Experimental and Structural Evidence from Higher Education," GLO Discussion Paper Series 675, Global Labor Organization (GLO).
    2. Gerardo Sabater-Grande & Nikolaos Georgantzís & Noemí Herranz-Zarzoso, 2023. "Goals and guesses as reference points: a field experiment on student performance," Theory and Decision, Springer, vol. 94(2), pages 249-274, February.
    3. Keshav Agrawal & Susan Athey & Ayush Kanodia & Emil Palikot, 2023. "Digital interventions and habit formation in educational technology," Papers 2310.10850, arXiv.org, revised Jan 2024.
    4. Chen, Jingnan (Cecilia) & Fonseca, Miguel A. & Grimshaw, Shaun B., 2021. "When a nudge is (not) enough: Experiments on social information and incentives," European Economic Review, Elsevier, vol. 134(C).
    5. Allen, James & Mahumane, Arlete & Riddell, James & Rosenblat, Tanya & Yang, Dean & Yu, Hang, 2022. "Teaching and incentives: Substitutes or complements?," Economics of Education Review, Elsevier, vol. 91(C).
    6. Florian Englmaier & Stefan Grimm & Dominik Grothe & David Schindler & Simeon Schudy, 2018. "The Effect of Incentives in Non-Routine Analytical Team Tasks," CESifo Working Paper Series 6903, CESifo.
    7. List, John A. & Shah, Rohen, 2022. "The impact of team incentives on performance in graduate school: Evidence from two pilot RCTs," Economics Letters, Elsevier, vol. 221(C).
    8. Tam, Hau-lin & Kwok, Sylvia Y.C.L. & Hui, Anna N.N. & Chan, Doris Ka-yin & Leung, Cynthia & Leung, Janet & Lo, Herman & Lai, Simon, 2021. "The significance of emotional intelligence to students’ learning motivation and academic achievement: A study in Hong Kong with a Confucian heritage," Children and Youth Services Review, Elsevier, vol. 121(C).
    9. Berry, James & Kim, Hyuncheol Bryant & Son, Hyuk Harry, 2022. "When student incentives do not work: Evidence from a field experiment in Malawi," Journal of Development Economics, Elsevier, vol. 158(C).

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    More about this item

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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