Giving students $20 or a trophy before a test — with the threat of taking it away if they do poorly — raises scores more than promising a future reward, concludes a study at low-performing Chicago schools by Steven Levitt (the Freakonomics guy) and others. Derek Thompson writes in the Atlantic:
First, they found that money works, and the amount of money really matters. Students were reportedly willing to exert significantly more energy at $80-an-hour, but not at $40-an-hour.
. . . Second, they learned that the rewards were most powerful when they were framed as losses rather than gains (i.e.: “Here is $20. If you fail, I’m taking it away.”) The technical term for this is loss aversion and it’s endemic. We’re more protective of money we have — or think we have — than we are aggressive about seeking money we don’t have. Third, they learned that “non-financial incentives,” like trophies, worked best with young people. Fourth, they learned that rewards provided with a delay — “we’ll get you that check in a month!” — did very little to improve performance.
Unfortunately, education’s rewards usually aren’t immediate. Telling students to study now so they’ll be ready for college or earn more in 10 years may not be effective.