The effect of financial rewards on students' achievement: Evidence from a randomized experiment
Bas van der Klaauw
Journal of the European Economic
Association 8, 1243-1265 (2010)
This paper reports on a randomized field experiment in which first-year university students
could earn financial rewards for passing all first-year requirements within one year. Financial
incentives turn out to have positive effects on achievement of high-ability students, whereas
they have a negative impact on achievement of low-ability students. After three years these
effects have increased, suggesting dynamic spillovers. The negative effects for less-able students
are consistent with results from psychology and behavioral economics showing that
external rewards may be detrimental for intrinsic motivation.
(Click here to
download the PDF file of the published paper)
Last updated: November 24, 2010.