TY - JOUR
T1 - Financial incentives and educational investment
T2 - The impact of performance-based scholarships on student time use
AU - Barrow, Lisa
AU - Rouse, Cecilia Elena
N1 - Funding Information:
We thank Eric Auerbach, Elijah de la Campa, Ross Cole, Laurien Gilbert, Ming Gu, Steve Mello, and Lauren Sartain for expert research assistance; Leslyn Hall and Lisa Markman Pithers with help developing the survey; and Reshma Patel for extensive help in understanding the MDRC data. We are also grateful to Todd Elder for sharing programs for exploring selection bias. Or-ley Ashenfelter, Todd Elder, Alan Krueger, Jonas Fisher, Luojia Hu, Derek Neal, Reshma Patel, Lashawn Richburg-Hayes, and Shyam Gouri Suresh, as well as seminar participants at Cornell University, the Federal Reserve Bank of Chicago, Federal Reserve Bank of New York, Harvard University, Michigan State, Princeton University, University of Chicago, University of Pennsylvania, and University of Virginia, provided helpful conversations and comments. Some of the data used in this paper are derived from data files made available by MDRC. We thank the Bill & Melinda Gates Foundation and the Princeton University Industrial Relation Section for generous funding. The authors remain solely responsible for how the data have been used or interpreted. The views expressed in this paper do not necessarily reflect those of the Federal Reserve Bank of Chicago or the Federal Reserve System. Any errors are ours.
Funding Information:
The incentive varied in length (as short as one semester and as long as four semesters), size of scholarship (as little as $1,000 and as much as $4,000), and whether there was a performance requirement attached to it. For comparison, in 2009–10 the maximum Pell Grant award was $5,350 per year (Office of Postsecondary Education 2012). Also, the PBSs were paid directly to the students, whereas the non-PBS was paid to the institution. Table 1 shows the structure of the demonstration for the Fall 2009 cohort more specifically—the structure was similar for the Fall 2010 cohort. There are six treatment groups labeled 1 to 6 in table 1. Group 1 was randomly selected to receive a California Cash for College scholarship worth $1,000, which is a typical grant that has no performance component and is paid directly to the student’s institution. Groups 2
Publisher Copyright:
© 2018 Association for Education Finance and Policy.
PY - 2018/8/1
Y1 - 2018/8/1
N2 - We evaluate the effect of performance-based scholarship programs for postsecondary students on student time use and effort. We find evidence that financial incentives induced students to devote more time and effort to educational activities and allocate less time to other activities. Incentives did not generate impacts after eligibility ended and did not decrease students’ interest or enjoyment in learning. Evidence also suggests that students were motivated more by the incentives than simply the effect of additional money. A remaining puzzle is that larger scholarships did not generate larger responses in terms of effort.
AB - We evaluate the effect of performance-based scholarship programs for postsecondary students on student time use and effort. We find evidence that financial incentives induced students to devote more time and effort to educational activities and allocate less time to other activities. Incentives did not generate impacts after eligibility ended and did not decrease students’ interest or enjoyment in learning. Evidence also suggests that students were motivated more by the incentives than simply the effect of additional money. A remaining puzzle is that larger scholarships did not generate larger responses in terms of effort.
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U2 - 10.1162/edfp_a_00228
DO - 10.1162/edfp_a_00228
M3 - Article
AN - SCOPUS:85054066899
SN - 1557-3060
VL - 13
SP - 419
EP - 448
JO - Education Finance and Policy
JF - Education Finance and Policy
IS - 4
ER -