Can paying children for attendance and grades boost scores, or will it do more harm than good? In development economics, one of the most popular programs over recent years are conditional cash transfer programs. Modelled on a randomised trial of the Mexican Progresa program (now Oportunidades), a succession of developing nations have put in place programs that pay parents a cash transfer if their children attend school. My read of the development evidence is that there is a strong consensus that conditional cash transfer programs are an efficient way of raising educational attainment (much more effective than, say, simply banning child labour).But in more affluent countries, conditional cash transfer programs are much more controversial, despite the fact that, according to a piece in the New York Times, they are proliferating across US cities:

In New York City and Dallas, high school students are paid for doing well on Advanced Placement tests. … Another experiment was started last fall in 14 public schools in Washington that are distributing checks for good grades, attendance and behavior. … At 80 tutoring centers in eight states run by Score! Educational Centers, a national for-profit company run by Kaplan Inc., students are encouraged to rack up points for good work and redeem them for prizes like jump-ropes.

There are plausible theories as to why these programs might work (kids respond to incentives) or cause problems (extrinsic rewards might crowd out intrinsic motivations). Ideally, we’d want some hard evidence from randomised trials that show us the short-run impact (while the cash is on offer) and the long-run impact (after the payments stop). And that’s just what New York City is trying to gather. As researcher Roland Fryer puts it:

“We have to get beyond our biases,” said Roland Fryer, an economist at Harvard University who is designing and testing several reward programs. “Fortunately, the scientific method allows us to get to most of those biases and let the data do the talking.”

Should we be worried about the ethics of trialling a program that might have negative effects? The New York Times article doesn’t delve into the issue, but it’s certainly an argument that comes up when I chat with people who believe the crowd-out effects are large. While I’d take the argument seriously, my own view is that in places where educational attainment is low and stagnant (eg. US inner cities), it’s worth rigorously testing on a small scale. The downside risk isn’t zero, but if the intervention works, the societal benefit is potentially very large.In Australia, conditional cash transfer programs could theoretically be implemented in a low-income school anywhere in the country. But the most likely context is in Indigenous education, where we know that Indigenous children are one year behind when they arrive at primary school, and two years behind when they finish primary school. Anyone game for a randomised trial?