MintFamily with Beth Kobliner: Should You Pay for an “A”? Part 3 — The Experts Weigh In

Does it work to coax kids into getting good grades by offering them cash incentives?

In this final installment of my three-part series (see part 1 and part 2), I wanted to delve into the research to see if we know what *really* works.

Specifically, would more kids get top grades if you offered cash incentives for an A?

Here’s Some of the Research That’s Out There

Cool work is being done on this topic by Harvard economics professor Roland Fryer, who’s also the founder of Harvard’s Education Innovation Laboratory (EdLabs).

Fryer studied nearly 40,000 students at low-performing urban public schools throughout Houston, Dallas, New York, Chicago, and Washington, D.C., and he found that paying for success, at best, results in a very small—if any—impact on improving grades.

For example, in Chicago, Fryer paid 9th graders for their report card grades: $50 for an A, $35 for a B, $20 for a C, and nada for a D.

The result: Students’ overall GPAs at the end of the year increased only slightly, with the average 9^th grader’s GPA increasing from 1.9 to 2.0, according to a research analyst at Harvard EdLabs.

And their test scores in state reading and math exams didn’t change at all.

In New York, Fryer investigated whether financial rewards improved performance on standardized exams. For each test, 4th graders earned $5 for completing the test and $25 for a perfect score; 7th graders received $10 to simply finish the test and $50 for getting all the answers correct.

The result: Kids in the 4th and 7th grades showed no improvement on standardized test scores when money was dangled before them.

Why Didn’t Payments Seem to Work?

One theory on why money can’t buy you good grades: kids didn’t know *how* to improve.

For instance, when Fryer’s team asked students in New York what the best strategies were to raise their exam scores, they said they’d try to read the test questions more carefully, re-read their answers to make sure they entered them correctly, and take their time rather than race to see who could finish first.

Though these are all reasonable ideas, Fryer pointed out that no student mentioned the techniques that are probably the most critical ingredients to boosting scores: reading the textbook more carefully, studying harder, or asking a teacher for help.

Likewise, students in Chicago did not seem to know the most straightforward strategies to improve their grades.

As a parent, this gives me pause. Maybe we’re demanding improvement without showing kids the paths they need to take to get there.

Furthermore, would students from high-performing schools (remember that Fryer focused on lower-performing schools) have fared better? What if he went into a high-performing high school in a wealthy suburb?

Would the cash incentive have an impact, since these upper-income kids may have seen how work can lead to a big economic payoff for their parents? Or would wealthier kids simply feel that the cash they would receive for a high grade wasn’t enough to make it worth the extra effort?

Another theory on why cash didn’t boost performance: maybe, in the end, the kids in this study—or perhaps kids of all economic levels—really do understand the steps they’d need to take to increase their grades, but they don’t have the self-control it takes to sit down before a test and get to work.

Put another way, maybe “kids these days” don’t have the ability to delay gratification. Sure, they may want to do better on a test next week, but not if they have to forego Facebook or TV time the week before the exam.

And though they may know it’s essential to pay attention in class or read the textbook at home, they may also feel that it’s more fun to chat with friends.

Clearly, more research should be done if we want to know what works. There are some researchers, though, who stress that whether it works or not, boosting grades with cash gifts sends a bad message to kids.

Stanford psychology professor Carol Dweck told New York magazine last month that emphasizing grades over improvement may even be a factor in the cheating scandals we’ve seen lately in schools across the country. Yikes!

What *Does* Work

Though he hasn’t seen much of a correlation between cash incentives and higher grades, Fryer found something that *does* work: paying for specific habits (for example, rewarding kids for reading books or learning specific math lessons).

In some newer experiments that he conducted in Houston, he paid students, parents, and teachers for making clearly spelled out, concrete improvements during the learning process.

For example, parents and students received $2 each time students mastered *weekly* math objectives, and parents were paid $20 and teachers were paid $6 for each parent-teacher meeting they attended.

This type of reward system actually worked. Students mastered 125% more math lessons than kids who weren’t paid. And when the amount of cash increased, the success rate went up as well.

For example, at $2 per math lesson, kids only mastered two lessons per week. But when teachers upped it to $6 per lesson, kids mastered nearly six lessons. Additionally, parents’ participation in parent-teacher meetings increased 87%.

What do you think of this “pay-for-good-habits” model? Any better or worse than “pay-for-grades”? Have you or would you try either one with your kids? I’d love to know your thoughts. 

© 2012 Beth Kobliner, All Rights Reserved

Beth Kobliner is a personal finance commentator and journalist, the author of the New York Times bestseller “Get a Financial Life: Personal Finance in Your Twenties and Thirties,” and a member of the President’s Advisory Council on Financial Capability. Visit her at bethkobliner.com, follow her on Twitter, and like her on Facebook.