Big Payback Seen in Cash Incentives for Students

Twelfth-graders who received a monetary reward for succeeding in their matriculation exams received higher grades and went on in larger numbers to higher education than their peers who did not receive such rewards. The finding is the result of a study by Prof. Victor Lavy of the Hebrew University and Prof. Joshua Angrist of MIT in the United States.

However the research, one of the first of its kind in the world, showed that economic incentives improved performance only among girls.

During the study, conducted in 2001 and backed by the Education Ministry, students from 20 schools among those with the lowest passing matriculation rates received NIS 6,000 for passing their matriculation exams. Twenty other schools were selected as a control group. The experiment, which encompassed 8,000 students, was to have continued for three years, however then-education minister Limor Livnat halted it after the first year. Nevertheless, researchers decided to wait five years and see whether the incentives had influenced whether students went on to higher education.

An article detailing the findings is to be published in the scholarly journal, American Economic Review.

Students were told, about six months before taking the exams, that they would receive money for passing. The research showed the number of students eligible for matriculation certificates jumped by 20 percent compared to the control group. However, when checking the results by gender, boys showed almost no change while the matriculation pass-rate among girls jumped by about 30 percent.

"The program particularly helped girls who, without any intervention, would have received 17 or 18 study units, but the monetary incentive got them to work harder and attain the minimum requirement of 20 to 21 units," Lavy said. However he added that the incentive did not help the weakest students, but that if it were to start in the 10th grade it might help those students as well.

One argument against monetary incentives is that it encourages studying mainly for the test and the beneficial effect lessens over time. The researchers therefore waited until the 2006/2007 academic year and cross-checked data with the National Insurance Institute. The data revealed that 30 percent more girls who participated in the program had gone on to college compared to the girls in the control group, while the boys' rates of entry into higher education did not change.

The girls were found to have mainly enrolled in public colleges and teachers colleges rather than to university.

Lavy says interviews with the girls following the exams revealed that they had "spent more time preparing for the tests and took part in more 'study marathons' than the boys." However, he conceded that the research could still not fully account for the gender difference in the results.

In recent years, various countries have increased economic-incentive projects to motivate students. New York City, for example, announced a project last year which included a $500 reward for students who succeeded. In other places in the U.S., students receive payments for not skipping school.

Lavy, who teaches economics at the Hebrew University and at London University said: "There's nothing wrong with incentives. Clearly, money shouldn't be handed out to students who would succeed anyway; the focus should be on weaker students." Lavy also said such incentives were no different than university scholarships for excellence.

Dr Nimrod Aloni, director of The Institute for Educational Thought at the Kibbutz Teachers College, called the experiment "vulgarization and total commercialization of the inalienable assets of the culture, such as the value of education and expansion of knowledge." Aloni said it was doubtful that people who had achieved scholastic success through monetary incentives would be better citizens or scholars, "because they had become used to selling themselves to the highest bidder."

"The issue of encouraging students to achieve is always on the agenda. We believe that one of the efficient means is to encourage students even before the final result, that is, the attaining of a matriculation certificate." the Education Ministry said yesterday.