Incentives to Learn: Merit Scholarships That Pay Kids to Do Well

Proposals for education reform generally focus on teachers and curricula. But the most important factor in education may be the student himself or herself. A growing number of states, including Georgia, Michigan, New York, and Massachusetts, have established programs that provide financial rewards in the form of merit scholarships for college for students who perform well academically. However, such programs are controversial with some educators, and the structure of many existing programs in the United States makes it difficult to evaluate rigorously the impact of such incentive programs because it is hard to identify for comparison a credible group of students who were not eligible for the program.

Examining the experiences of programs outside the United States may well be informative in helping to understand the impact of incentives for students. We collected evidence from a program in Kenya, in which girls in public schools who performed well were offered merit scholarships that covered the cost of the fees charged by public schools at the time. Their families were offered grants to help cover the cost of school supplies. The program was implemented by a nonprofit organization, which phased it into a number of schools in random order, allowing us to compare schools that were eligible for the program with other schools where the program had not yet been introduced. The results of our evaluation, conducted in 2001 and 2002, indicate that the program significantly improved the test scores of girls. Moreover, the program had salutary spillover effects: test scores of students who were not eligible for-or had no hope of earning-the award also improved, as did school attendance for both students and teachers.

Incentives to LearnPublished PaperAfrican DevelopmentHealthEducation and Human Capital2009
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