Economic incentives increase students’ motivation to learn, according to the findings of a study from the University of Pennsylvania (UPenn) of 40,000 students in 88 high schools in Mexico. The study’s central goal was to determine what policies can improve educational outcomes. Jere Behrman, professor at UPenn, presented the study at the 4th Development Week, organized by the Navarra Center for International Development of the University of Navarra at IESE Business School in Madrid.      

To carry out the study, the research team divided the students into four groups. In the first, students were offered economic incentives based on personal achievement in mathematics, and rewarded for good grades or simply improving on past semesters. In the second group, the incentives were given to mathematics teachers, if they succeeded in increasing their students’ performance. The third treatment gave incentives to the whole educational community (students, mathematics teachers, teachers of other subjects, as well as administrators) for math performance of the students. The final group served as a control, meaning no one received economic incentives. 

Motivating the educational community

While the first of the three treatment groups improved math achievement on the national PISA test to the level that they would have if they stayed three more years in school, in the second group the results were barely noticeable. The third, meanwhile, experienced an improvement in mathematics performance equivalent to double the improvements made in the first group.

According to Professor Behrman, targeting the whole educational community was the most effective approach because “students need to be motivated for their teachers to reach them.” The payments were associated with levels of individual and collective improvement, and increased with the degree of academic improvement. Students received the greatest rewards for moving from a low level to a high level of performance, more than if they achieved a high level starting from average performance.

In Behrman’s view, the reason that classmates did well if the student received more money had to do with two potential synergies: “On one level, a simple effect could be creating a learning environment in class that fosters everybody’s work. Also, a second synergy arises when students help each other. 

Social valuation of teachers

With respect to the incentives that can contribute to improvements in education, Behrman affirmed, just as the study showed, that “the best way to assure positive results is to give rewards for doing well. “For him, it is not enough to help schools to acquire more material resources, such as blackboards, books, or computers, or contribute to the education of teachers, “the empirical evidence shows that none of these policies have large effects, and their benefits are almost non-existent.”

However he is cautious about the extrapolation of these findings to other countries, where they could possibly have no effect, and instead argues that “the sensible thing” is to test the policies and evaluate the results. 

In any case, he affirmed that there while there are differences between countries, those that obtain the best results in mathematics, like Finland and South Korea, also share something: “both education and teachers have a high social value.”

Jere Behrman, Professor at University of Pennsylvania has worked with the World Bank, the Inter-American Development Bank and the United Nations Development Program. He presented this work at the fourth annual Development Week, a conference on development economics, organized by NCID.

NCID is a part of the Institute of Culture and Society (ICS) of the University of Navarra, which looks for viable, sustainable, and scientific solutions to extreme poverty in African, Asian, and Latin American countries. To do so, it has three lines of research: quality of public and private institutions, technology transfer, and migration.