| While graduating from high school has become increasingly important, dropout rates remain high, particularly among low-income and minority students. In this paper, we test the effect of performance-based incentives on educational achievement in a Chicago area school district made up of largely low-income and minority students. We implemented a randomized field experiment among high school freshmen that offered monthly financial incentives based on multiple measures of performance including attendance, behavior, grades and standardized test scores. We also compare the effectiveness of varying the reward recipient (parents or students) and the incentive structure (piece rate or lottery). Our preliminary results suggest that while the overall effects of the incentives are modest, the program has significant effects among students in the middle of the achievement range -- that is, those students on the margin for meeting the monthly achievement standards. These students continue to outperform their control groups peers after the program ends in their sophomore year. These results suggest that sustained effort on multiple performance measures can lead to gains in human capital that have lasting returns. |
