November 18, 2004

silhouette3.JPG From the desk of Jane Galt:

Markets in everything

Alex Tabarrok points out that while we seem to be willing to try anything to improve our education system, we haven't tried the most obvious thing: paying the kids to learn. Now that someone else has thought of it, it seems obvious to me that this will be highly effective, and indeed, early study results are very promising. As long as the positive externalities of a better-educated citizenry are high, this will even be cost effective. Politically, though, my gut tells me it won't go very far, though I find it hard to articulate exactly why.

Posted by Jane Galt at November 18, 2004 12:14 PM | TrackBack | Technorati inbound links
Comments

Resistance to this idea probably comes from several quarters.

One, many educators think education should be valued for its own sake, not for instrumental reasons. They will view child-focused incentives as leading to a short-term reward mentality.

(I think it would be best to start the reward system off as near-immediate for young kids and then move towards long term, so that children learn self-discipline to gain longer term rewards.)

Two, there is the ancient aristocratic/intellectual disdain for all things commercial/financial/material. Only the philistine bourgeouis stoop to be interested in such things.

Third, it damages a teacher's ego to think that the kids don't care about the subject matter for its own sake or he isn't as inspiring/charismatic as his colleagues, who can motivate the kids without material incentives.

Posted by: dubious on November 18, 2004 12:59 PM

What he said.

Posted by: John on November 18, 2004 01:10 PM

I think a major problem is the exact same one families with multiple children face when trying to put in place such a reward system (there was a good episode of Daria back in the day that portrayed this problem well).

What's fair and for the best? Do you pay for improvement, or performance? If improvement, kids who did well from the start are left out, and dis-incentive-ized (please ignore the made up words...). If performance, then do smart kids now have an undeserved monetary advantage?

Posted by: Stephen Duncan Jr on November 18, 2004 01:42 PM

Mr. Duncan is correct; The Fairness Sheriffs would likely stamp out anything that might work.

Posted by: Will Allen on November 18, 2004 02:16 PM

Stephen,

The idea is that you don't need to pay high performance kids anything. They are already doing fine. We care about the kids who are failing, and the idea is that instead of spending many dollars on all the school-program related crap that has proven not to help them at all, we can spend significantly less just paying the kids to succeed, and (this early evidence suggests) get much better results.

Sure, this could create some incentive for high-performing children to fail, deliberately, in order to qualify for the monetary rewards net period, but is this really realistic? These aren't million dollar prizes -- the costs to a high-performer of getting low marks for one term are likely to vastly outweigh these slight monetary benefits.

And kudos to dubious for the idea of ever-increasing deferral of reward; if properly structured this would indeed be a great way to teach kids about self-discipline, delayed gratification, etc.

To bad this idea doesn't have a bat's chance in hell of ever being put in place on a widespread basis, because we all care about self-serving political schenanigans more than we care about our kids.

Posted by: Smokin' Joe on November 18, 2004 02:24 PM

WE used to have this--they were called merit-based scholarships. Just a thought.

Posted by: john bragg on November 18, 2004 02:59 PM

Everyone here seems to assume that teachers will be very against this idea. But I know plenty of teachers who already use similar reward systems in their classes (though they usually use other goods or privileges), and would probably be thrilled not to have to pay for student rewards out of their own pockets.

Posted by: Jeff on November 18, 2004 03:01 PM

Smokin' Joe:

I think the psychological impact on high performers of rewarding others and not them is too significan to ignore.

Also, this all depends on what age kids we're talking about. To younger kids, the reward is certainly, to them, going to seem to vastly outweight the "benefits" of getting good grades instead of failing for a term.

The other problem to consider: such a proposal will create a larger incentive for cheating too.

All this assumes the monetary award is large enough to create an incentive, i.e. greater than current benefits.

As Jeff mentions, incentives already are used by schools and teachers. My elementary school gave some limited reward for honor roll status, etc. The incentive was never great enough to change students' performance.

Therefore, this proposal to be effective, the monetary award would have to be fairly large. Large enough, I judge, to be a disincentive to long-term success.

Posted by: Stephen Duncan Jr on November 18, 2004 03:35 PM

You know, it's not like education is without benefits to those who pursue it. Perhaps that's why people pay as much as they are allowed to borrow to go to school. Inverting the transaction seems somewhat perverse; for comparison, why don't blog writers pay people to read them? Ostensibly, the benefit vector is pointing the wrong way.

I don't think this is a matter of a good idea that won't get a fair hearing. People unable to realize that education benefits them may not be suitable for education in the first place.

Posted by: Mike on November 18, 2004 04:08 PM

The other market-based approach that we can't try is paying teachers to teach.

Posted by: Andy Freeman on November 18, 2004 04:21 PM

This liberal/libertarian Californian happens to think this is a great idea. And I think the simple solution to the complaints above (about rewarding improvement vs. rewarding achievement) is to reward both.

Pay $20 for an A, $10 for a B. Plus $10 every time you increase your performance over last time.

Now everyone has an incentive to improve regardless of level. But achievers don't feel like they're getting unfairly punished and people who improve early on have an incentive to keep achieving.

I think this whole thing is great and obvious. Incentives matter.

Posted by: IdahoEv on November 18, 2004 04:23 PM

I remember hearing Newt Gingrich talk about this (in a much more limited way) over a decade ago: he was touting a program called "Learn to Earn" where kids from underachieving schools (ahem) were paid something like a dollar a book they read during the summer. They were quizzed in the most benign way possible to make sure they'd actually read the books, but it seemed to work out pretty well. Wonder what happened to that?

Posted by: David Hecht on November 18, 2004 04:37 PM

I tenatively find the idea appealing. But actually making it work would take a lot of resources and experimentation.

Some of the issues that occur to me include:

1) Would splitting some portion of the "rewards" with the parents of elementary school children improve success? In Canada at least some of the barriers children face to school success include lack of structure at home (especially bedtime routines), ongoing psychosocial problems amongst caregivers (addictions, MH disorders etc), poverty (getting your kid to school on a -40 day without a car ain't easy), and peer/neighbourhood norms (if all your friends are cutting school why would you go, indeed would it be safe for you to go?).

I think one of the primary jobs of a parent is to create the potential of success for their children and completing school is huge predictor of success as an adult. But there is a HUGE difference in the number and type of problems parents face in different settings. If a parent has no psychosocial problems, lives in a suburban area with a good safe school and a strong neighbourhood norm of school attendance it might be pretty easy to get their kids to go to school. A depressed single mother living near a crack house in a gang controlled neighbourhood faces a MUCH different task. So why not recognize this upfront and pay parents who struggle to meet those challanges? If trying to meet those challanges in order to get paid leads caregivers to treatment, parent training, etc then great.

2) That said a program like this might work best if it is universally applied. Targeted programs certainly don't have the same level of support. More importantly NOT rewarding behaviour can lead to it dropping in frequency. Hopefully those parents who have an easier job have installed a sense that good grades and school attendance are intrinsicaly rewarding but that is an empirical question.

3) NOT being in school can be quite rewarding in the short term. It is more FUN to play all day, social status can be attached to criminal behaviour and gang membership and I have interviewed kids who make $50 to $100 a day tax free from crimes. Competing with pulls like that may take a lot more resources than taxpayers are willing to commit.

Posted by: Rob Stephenson on November 18, 2004 04:47 PM

The pay for educational performance idea may also not play well with the strict discipline parenting set. Granted, most parents pay allowances as a carrot for keeping your room clean, doing dishes etc. But many parents might see such a compensation system as intruding on their parental role of motivating their children to succeed academically.

Posted by: Chuck Smith on November 18, 2004 04:52 PM

Bonafides: I'm a high school gov/econ teacher with nearly 2 decades on the job, now in a suburban HS that is now quite urban in demographics.

Reactions:

1. Lawd save us from most of the intelligencia. Please no one philosophize until you have spent a few years on the job. Many things down here are so counter intuitive, one simply wonders if parallel universes do exist.

2. Think of a jigsaw puzzle. A lot o’ pieces. Some easy to figure out, some next to impossible. Some with only marginal importance to the end result, some extraordinarily essential to the final resolution. That my friends is problem solving in public education, or any other complex social arena for that matter.

3. Paying kids for achievement will work for some, not for others AND it will have a limited half life. Once it becomes de rigueur, it will be on a count down to obsolescence. Yet, if integrated into a campaign of various such activities. I would expect there to be meaningful outcomes.

Posted by: Keith G on November 18, 2004 04:58 PM

My parents paid us for grades. Each A was worth something, and each B was worth something less. C and below was worth nothing. I usually ended up with about $20 per report card, if I remember correctly. My parents did this only for elementary school. Once I started getting all As in middle school (and high school, and college, and grad school), they stopped paying.

Damn, that pissed me off.

Posted by: meep on November 18, 2004 05:06 PM

Dubious wrote:

"One, many educators think education should be valued for its own sake, not for instrumental reasons. They will view child-focused incentives as leading to a short-term reward mentality."

How 'bout:

"Many citizens think teachers should value teaching for its own sake, not for mercenary reasons. They view teacher-focused incentives as leading to a short-term reward mentality."

I don't really think teachers shouldn't be paid, of course. But our taxes do pay them because schoolteaching is considered valuable work by the majority of people.

Do we or don't we consider a student sitting his butt in a chair, following orders for six to eight hours a day, valuable? Obviously we do, or we wouldn't be so hot on sending them there. Why don't we express that concept in terms of a market value?

Is it because we feel that the time and the work of children really have no value? Or do we prefer to treat kids in the same way we treat slaves, forcing them to obey orders and do assigned labor without compensation? I thought that was supposed to be unconstitutional or something.

Posted by: speedwell on November 18, 2004 05:14 PM

It is also amazing to me that there is so little merit/performance based pay in teaching. Given standardized tests that measure basic skills and given that ye olde Permanent Record contains data on each student's past performance, it would seem pretty easy to set up such a system of bonuses.

That is, suppose we consider someone teaching 8th graders math. Suppose Jane's skills tested at grade 6.5 last year. For every grade she tests better, give a bonus of $100, so that if her performance improves to 8th grade norms, the teacher gets a $150 bonus.

The standard criticism I hear of performance based bonuses are three.

First, it would involve the dreaded "teaching to the test." At least for K-8, basic skills and knowledge (which we can measure on a test) are more important than critical thinking skills, creativity, etc (which are probably harder to measure). The latter are important, to be sure, but the first are much more so. Better that students should be well-taught to the test than they should be ill-taught to no test.

Second, it would lead to no one wanting to teach kids that are less able, who have messed up home lives, etc. This is solved by the longitudinal measurement of each student. It could be further reduced by making the bonuses progressive, whereby pay-per-progress is higher for bringing badly-testing students up to speed than is pay for increasing the scores of students who already test well.

Third, it would be unjust to teachers as workers, as it would make their pay contingent on things outside their control (Jane gets mono and is out of school for 2 weeks). Given a sample size of 20-30 students, this shouldn't be a major concern. After all, some students will presumably have random events that increase their performance.

Posted by: dubious on November 18, 2004 05:27 PM

The problem isn't "teaching to the test", it's the pressure to dumb down the test, or to pad the criteria, so that kids who show up are considered to be "learning".

Posted by: Anthony on November 18, 2004 06:13 PM

The experiment of free tuition to state colleges for students who make good grades in high school, attain admission to the university, and maintain good grades in college is a form of the same idea.

I seem to recall that when that idea was proposed, Jane thought it was a terrible idea because all she learned in college was how to type. See here

Posted by: Dwight Mredith on November 18, 2004 08:11 PM

Perhaps because it implies something about culture. There is an argument in development economics that people don't invest in education because it is not rational -- we like to think that pockets of underachievement occur because, in some fundamental way, people are being rational about their life chances. But if paying for performance works, this implies that just a little bit of incentive will make people do better (and this without altering their life chances). Which shows something irrational in their culture -- that can be altered by a little bit of money. And saying anything about culture in public policy is unpopular.

Posted by: Isaac on November 18, 2004 08:28 PM

Why not take things a step further.

Close down the schools, and spend all of that money on educational rewards instead. Figure out what it is we really want kids to learn and put a whopping big bounty on learning it. $5000 for basic literacy. $5000 for basic numeracy. $2000 for algebra, or grade school science, or whatever. Given what the schools are presently spending, those numbers could probably be higher. Set up some way for people to sign over part of their reward if they want to hire teachers to help them hit the targets.

I suspect the number of ineducable kids would drop rather sharply. And it might also be found that most kids are actually able to learn somewhat more rapidly than they do at present . . .

Politically, though, my gut tells me it won't go very far. ;)

Posted by: Matt on November 19, 2004 12:22 AM

Impossible to administer. All the kids get A's now no matter what effort they expend. How do you differentiate? Oh, I see, you pay them to show up and not fall asleep in class.

I'm not proud of this, but my son graduated from High School Academic level prep for college. He didn't know which was bigger, 3/8 or 5/16. Got good math grades the entire time.

Posted by: EddieP on November 19, 2004 01:29 AM

This is where libertarianism jumps the shark.

I know you all have a knee-jerk preference for using financial incentives to solve all problems. But you're actually in favor of the government redistributing taxpayer money to children in order to get them to perform? And you trust the government to come up with a system that is remotely fair?

BTW, after any attempt gets utterly bogged down in endless battles over equity issues, cheating, and funding, don't go blaming the "fairness police" as Will Allen did above. When you're using taxpayer money, the taxpayer's have a right to bitch about those problems as much as they want.

Posted by: space on November 19, 2004 08:42 AM

I believe the term I used was "market value." If the government is the sole customer (as it would be were we to rely on it to make the payments out of the taxpayers' pockets), we would have nothing like a market in any rational sense.

Posted by: speedwell on November 19, 2004 09:09 AM

I'm going to refer you to 2 essays by Paul Graham.
http://www.paulgraham.com/nerds.html
http://www.paulgraham.com/say.html

longish excerpt from the first link:
"So if intelligence in itself is not a factor in popularity, why are smart kids so consistently unpopular? The answer, I think, is that they don't really want to be popular."

"If someone had told me that at the time, I would have laughed at him. Being unpopular in school makes kids miserable, some of them so miserable that they commit suicide. Telling me that I didn't want to be popular would have seemed like telling someone dying of thirst in a desert that he didn't want a glass of water. Of course I wanted to be popular."

"But in fact I didn't, not enough. There was something else I wanted more: to be smart. Not simply to do well in school, though that counted for something, but to design beautiful rockets, or to write well, or to understand how to program computers. In general, to make great things."

"At the time I never tried to separate my wants and weigh them against one another. If I had, I would have seen that being smart was more important. If someone had offered me the chance to be the most popular kid in school, but only at the price of being of average intelligence (humor me here), I wouldn't have taken it."

"Much as they suffer from their unpopularity, I don't think many nerds would. To them the thought of average intelligence is unbearable. But most kids would take that deal. For half of them, it would be a step up."

The bottom line (assuming you actually read this far), is that paying kids to do anything will only interfere popularity contests. If you can create a market for learning, it will reward those for whom learning is important, and the popular kids will keep blowing things off.

I don't think many of you remember just how messed up jr/sr high school was, nor what an unbearable person you were at that age.

Posted by: Peter on November 19, 2004 09:46 AM

Dwight, it's not the same thing for a number of reasons.

First, the skills that people learn in elementary school, unlike the skills that most people learn in college, are critical to success in later life. If you can't read or do basic math, you are doomed. If you haven't read Remembrance of Things Past, you can still have a pretty fulfilling life in our society. I wouldn't favour such a programme at the college level, even if it worked, because once you've gone to college, it really matters very little to most people whether or not you learned the material in your major.

Second of all, this programme is likely to be vastly more successful than the Georgia programme, which seems mainly to have functioned as a subsidy to middle class kids who were going to college anyway, because the incentive is immediate. Spend some time working with inner city children if you think that the main obstacle to their academic success is the fear that they won't be able to pay for college.

Posted by: Jane Galt on November 19, 2004 11:03 AM

Well, if you want to change the popularity/social incentives for kids to learn, how about collective rewards (pizza parties) for the whole class when a student performs well and collective punishment for the whole class when a student performs badly.

Very anti-libertarian, of course. I'd probably oppose such a thing in a vanilla public school. But if a charter/voucher school wanted to experiment with it, more power to them.

Posted by: dubious on November 19, 2004 12:06 PM

Really, the idea founders on the existing educational system. "Conservatives" will oppose it because the standards will be watered down to the point where all the kids are getting the reward, regardless of actual performance. "Liberals" will oppose it because, until the standards are watered down, it will create invidious distinctions and an unhealthily competitive between children.

Posted by: Anthony on November 19, 2004 12:52 PM

I was rewarded for good grades in a number of ways. My parents would give me stuff for good grades and occasionally, teachers would also give me stuff for good grades. This included cash, privileges in school, merchandise, etc. There already is an incentive system for kids to get good grades.

Posted by: Manish on November 19, 2004 06:07 PM

Being paid for improvement: When I was in high school, we had a similar system for PE. We were tested on things like running the mile 4x/year, and we had to improve a set number of goals by a set amount in order to get an A (or B, or whatever). What happened was that everyone ran *really really slowly* the first time. On the other hand, the system did make me work out my extremely weak arm muscles on a regular basis (which no other PE class had done), so maybe it did work after all.

Posted by: ca on November 19, 2004 07:18 PM

This is so pitiful, so far behind the curve.

Since we cannot implement paying adults for washing their hands in public restrooms, who thinks we might ever advance to paying kids in school?!

The latest figures that I read, a couple months ago, is that only 3% of motorists are signed up for the Interstate Highway Credits: several spy satellites now monitor signed-up cars. If you drive at less than 5 mph in excess of the speed limit, you get 20% off your gasoline( it comes from the Halliburton Fund.) Driving 8 mph above the speed limit drops the refund to 5%.

Next addition: Curb-Your-Dog incentives.

Watch the gays try to horn in on the Fidelity Incentive - - at the incentive level of less-than-two-infidelities-per-year.

Posted by: LarryH on November 20, 2004 06:17 AM

Now that the SAT has had its top scores made much more common, applicants to college today stand in need of some additional prizes to distinguish themselves, and will respond in superabundance to such incentives. Note that Long Island students routinely win 20 or 25% of the top science prizes, even though only 1% of the population of the country lives there; and the colleges consumed and fevered with anti-merit malice, which directs its venom against the young and powerless, set up geographic and other diversity obstacles against such students. Give them prizes for scoring high on GRE subject tests, tens of thousands in scholarship money for college, so that they can distinguish themselves the better, and bowl over the admissions-office egalitarian depravities, which speak of justice as primarily racial.

Posted by: John S Bolton on November 21, 2004 04:48 AM

Have none of you heard of the concept of "intrinsic motivation"?

"Incentives matter" is a tautology, an analytic truth. The point is: differing desired behaviors (especially long term ones) have differing kinds of incentives that bring them out. It is not just a matter of money being the sole incentive for everything.

Posted by: benson bear on November 22, 2004 04:57 AM

As a high school science teacher who has been in the classroom for 20 years, I laugh at all suggestions on how to get kids to learn.

All we have to do is fail them, and be allowed to fail them. There will come a time in their future, one, two, five years down the road, when they will realize that they screwed up.

I wish I had a dollar for every former student who has told me that they wish they had paid attention in school and gotten better grades. They realized that it wasn't the right thing to do. It's at that point that they go to vocational school, go back and get their diploma, or whatever, and they make their own lives better.

The other thing we need to do is quit allowing parents to tell us how to do our jobs. Yes, we want input and support from parents, but too many administrators kowtow to them, and it makes us teachers feel like the customers are running the business. I don't like it.

Don't pay kids to learn. Let them fail, let them feel bad, and let them realize later on that they screwed up. It's okay to feel bad.

Posted by: geomike on November 22, 2004 04:45 PM

"As a high school science teacher who has been in the classroom for 20 years, I laugh at all suggestions on how to get kids to learn."

That pretty much says it all, doesn't it? And this creep is still in the classroom?

Posted by: anonymous on November 23, 2004 12:44 PM

This issue of school performance incentives is somewhat virtuous, when it combines school funding("money") with a more direct, more significant basis for spending. Incentives would, at last, put money into a factor of greater significance - student MOTIVATION.

Far too much money is wasted in public schooling. Pouring money into our schools is the EASY way to rationalize that we're addressing the nationwide problem of unsuitable performance. "Well, we're putting more money into education," - - what a cop out.

Changes in attitude, seen as declines in devotion to "the grind" of shoolwork, more than offset the increase in funding. When parent(s) show less respect for the value of public education, the children tend to respond in kind.

I favor voucher schools, but for a different reason. When 10%-20% of children switch to voucher schools, the public school principals will justifiably complain that the voucher schools are 'stealing' some good students. How can that be? Well, the parents-and-their-children who don't care a wit about an education won't relocate. The voucher schools will tend to have a more diligent, receptive student body because the parents who switch their kids will TEND to better-appreciate the value of schoolwork ... so attitude and motivation will be distinctly improved in the voucher schools.

Note that this will create a bias when the test scores are compared, since the voucher schools necessarily start out with a higher-performing pool of students, who maintain a ckassroom attitude that fosters less disrution, and who expect to devote greater diligence to homework.

Voucher schools will probably offer a refuge for diligent families who are saddled with a mediocre environment(of less diligent students and swamped teachers.)

Posted by: LarryH on November 24, 2004 01:57 PM

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