Understanding the response to financial and non-financial incentives in education - Field experimental evidence using high-stakes assessments

Sep 5, 2026

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This paper analyzes the impact of incentivizing students’ effort on high-stakes assessments using a field experiment involving over 10,000 high school students. Rich administrative-style data and machine learning methods are used to study treatment heterogeneity. Financial and non-financial rewards are compared in terms of motivating effort rather than grades, and outcomes are measured with high-stakes assessment results. The results show minimal average effects overall, while identifying a “right tail” of highly responsive students.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages15

Reading Time38 min

AccessFree to download

Introduction

Incentives and underperformance

Randomized field experiment design

Incentive types and implementation context

Outcomes and key findings

Economics of Education Review 85 (2021) 102195 Contents lists available at ScienceDirect Economics of Education Review journal [homepage:](homepage: www.elsevier.com/locate/econedurev)[ www.elsevier.com/locate/econedurev](homepage: www.elsevier.com/locate/econedurev) | Understanding the response to financial and non-financial incentives in education: Field experimental evidence using high-stakes assessments | | | | | --- | --- | --- | --- | | Simon Burgess a, Robert Metcalfe b, Sally Sadoffc, *
a University of Bristol, 2C1, The Priory Road Complex, Priory Road, Clifton, BS8 1TU, UK
b University of Southern California, 3620 South Vermont Ave. Kaprielian (KAP) Hall, 300, Los Angeles, CA 90089-0253, USAc UC San Diego, 9500 Gilman Drive, La Jolla, CA 92093, USA | | | | | A R T I C L E I N F O | | A B S T R A C T | | | JEL codes:
I20
I24
C93
Keywords:
Education
Effort
Incentives
High-stakes Assessments
Field experiment | | We analyze the impact on high-stakes assessments ofincentivizing students’ effort in a field experiment with over 10,000 high school students. We contribute to the literature by using our rich data and machine learning techniques to explore treatment heterogeneity; by comparing financial and non-financial rewards in rewarding effort rather than grades; and by using high-stakes outcomes. We find little average impact of incentives in the overall population, but we identify a “right tail” of highly responsive students: in the upper half of the responsiveness distribution, test scores improve by 0.1-0.2 SD, about half the attainment gap between poor and non-poor students. | | 1. Introduction Many countries struggle with persistently underperforming students and schools. Low educational achievement has a lasting impact on individual lives and represents lost output for the economy as a whole (Hanushek, 2009; Michelmore & Dynarski, 2016). Many governments are turning to new ideas in an attempt to deal with this problem, including the potential for incentives to increase student motivation and change behaviors in schools. As we detail below, the results of many of these studies have been disappointing for policy-makers, showing null or small effects on average. Increasingly, however, researchers are using richer data and stronger techniques to move beyond estimating the average effects of an intervention. Establishing the nature of treatment heterogeneity helps to illuminate the mechanisms behind the effectiveness (for some) of the intervention, and also allows policy to be targeted more effectively and cheaply. In this paper, we report the results of a randomized experiment that includes over 10,000 students in 63 high schools spread across England, as shown in Fig. 1. We randomized schools to one of three treatment groups: Financial Incentives, Non-financial Incentives or Control. Both of the incentive treatment groups rewarded students on multiple dimensions of effort (attendance, behavior, classwork, and homework) measured over a five-week period (a half-term), with four such periods between September and April. The financial incentives offered students up to £80 per half-term (for a total of £320 over the year).1 The nonfinancial incentives offered students the chance to qualify for a highvalue event determined jointly by the school and the students, such asa trip to the national soccer stadium or an amusement park, costing approximately £40 per student per term (for a total of £80 over the year). Our field experiment was implemented in high schools in England, in the final year of compulsory schooling when the pupils are 16 years old, leading up to the high stakes assessments called the General Certificate of Secondary Education (GCSE). GCSEs serve as the primary gatekeeper for students to stay in school and progress to college.2 They are also key * Corresponding author. E-mail addresses: [Simon.Burgess@bristol.ac.uk](Simon.Burgess@bristol.ac.uk) (S.

FAQs

How does the study evaluate incentives in education?

It uses a randomized field experiment across 63 high schools, assigning schools to Financial Incentives, Non-financial Incentives, or Control. Incentives target multiple dimensions of effort over a five-week period and recur across terms.

What kinds of rewards are used for students’ effort?

Financial incentives provide monetary rewards up to £80 per half-term, while non-financial incentives offer opportunities to qualify for a high-value event jointly determined by the school and students.

What impact do incentives have on GCSE outcomes?

The study finds little average impact on GCSE performance for the overall sample. However, it identifies highly responsive students where test scores improve, narrowing the attainment gap for students with different prior status.

Sep 5, 2026

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