SMU SOE Seminar (Dec 21, 2016): When Student Incentives Don't Work: Evidence from a Field Experiment in Malawi

    We study the impacts of two types of merit-based scholarships on performance of primary school students through a field experiment in Malawi. One criticism of merit-based scholarship programs is that by providing rewards to only the very top performers, lower-performing students who are unlikely to receive the incentive may not respond to the programs. An incentive design that could address this concern follows that proposed by Barlevy and Neal (2012), in which students are grouped by baseline score, and incentives are awarded to the top performers in each group. We study the impacts of this “relative” merit-based scholarship program alongside a more typical “standard” merit-based scholarship program that provided scholarships to the top students in the sample. One hundred seventeen classrooms in 31 schools were randomly assigned to either the standard merit-based scholarship program, relative merit-based scholarship program, or to a control group. We find no evidence that either scholarship program increased test scores. In fact, the standard merit-based scholarship decreased student test scores compared to the control group. This corresponds to decreased motivation to study and time spent studying, as measured in follow-up surveys. Moreover, the decreases of motivation, study time, and test scores are larger in those with lower baseline test scores, who are less likely to receive the award. The relative merit-based scholarship program had no significant impacts on student test scores, although there is little evidence of negative effects, as in the standard merit-based scholarship scheme. 

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