A Second Chance at Passing: Impacts of a Scholarship for Students Retaking Principles of Microeconomics

Introductory economics courses have high failure rates, and students who repeat courses do not necessarily perform better on subsequent attempts, which can negatively impact student retention. We evaluate whether a financial incentive of $1,000 improves pass rates and grades among students retaking Principles of Microeconomics. Eligible students were 36 to 87 percent more likely to pass, depending on their awareness of the opportunity. Consequently, they earned significantly better grades. These results provide new evidence that a scholarship for students retaking difficult introductory courses can have large, positive effects on student performance.