Incentives for Students

This week, Gary Becker and Richard Posner discuss programs like the one in New York City that pay children to attend school and do well on exams. I’m surprised that this idea isn’t considered more seriously in St. Louis. After all, St. Louis suffers from some of the same problems as New York, such as a high drop-out rate and low test scores. And many economists support the effort. Becker is enthusiastic in his praise of the incentive programs:

I am confident that it will raise the performance of the students participating. The reason is simply that boys and girls as well as adults respond to incentives, as every parent realizes time after time.

Posner, on the other hand, is more cautious:

The largest indirect cost, I would guess, would consist in relaxed pressure to improve the public schools or to allow them to be bypassed by means of voucher systems. High rates of truancy may be due in significant part to low quality of schools. Paying children to attend school will reduce truancy rates some but without improving school quality, and perhaps without improving the education of the children receiving the payments.

Posner’s point makes sense because the evidence in favor of incentive programs comes from developing countries where children leave school to work and help support their families. They would like to be in school, but they can’t give up the income from their jobs. An incentive program allows them to earn money while attending school.

Before implementing incentive programs, we need to consider whether children are being pulled away or pushed out. If children are leaving to earn money, as is the case in some developing countries, paying them to stay might be appropriate. But if children are leaving because the schools are bad, an incentive program would just keep them in an unproductive environment.

My guess is that both of these factors are at play in St. Louis, at least in the older grades. There’s no reason we couldn’t try to address both. For example, a charter school with afternoon and evening classes would allow students to work during the mornings — like this school in Texas. Or students could combine high school classes with paid internships and apprenticeships. A combined choice/incentive program would keep students in school and improve the quality of their educational experience.