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

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Listed:
  • 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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    References listed on IDEAS

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    1. 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.
    2. Steven D. Levitt & John A. List & Sally Sadoff, 2016. "The Effect of Performance-Based Incentives on Educational Achievement: Evidence from a Randomized Experiment," NBER Working Papers 22107, National Bureau of Economic Research, Inc.
    3. Joshua Angrist & Victor Lavy, 2009. "The Effects of High Stakes High School Achievement Awards: Evidence from a Randomized Trial," American Economic Review, American Economic Association, vol. 99(4), pages 1384-1414, September.
    4. Uri Gneezy & Stephan Meier & Pedro Rey-Biel, 2011. "When and Why Incentives (Don't) Work to Modify Behavior," Journal of Economic Perspectives, American Economic Association, vol. 25(4), pages 191-210, Fall.
    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.
    6. 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.
    7. 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.
    8. Eric P. Bettinger, 2012. "Paying to Learn: The Effect of Financial Incentives on Elementary School Test Scores," The Review of Economics and Statistics, MIT Press, vol. 94(3), pages 686-698, August.
    9. Oreopoulos, Philip, 2007. "Do dropouts drop out too soon? Wealth, health and happiness from compulsory schooling," Journal of Public Economics, Elsevier, vol. 91(11-12), pages 2213-2229, December.
    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. Uri Gneezy & John A. List & Jeffrey A. Livingston & Sally Sadoff & Xiangdong Qin & Yang Xu, 2017. "Measuring Success in Education: The Role of Effort on the Test Itself," NBER Working Papers 24004, National Bureau of Economic Research, Inc.
    12. Jacob, Brian A., 2005. "Accountability, incentives and behavior: the impact of high-stakes testing in the Chicago Public Schools," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 761-796, June.
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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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