One of the more radical (and controversial) ideas in education reform these days is to offer students cold, hard cash in exchange for performance. The idea is that, although some students might not be motivated by the sheer joy of learning, their priorities might change if they are offered concrete financial rewards for academic achievement.

The New York Times has a story today discussing the mixed results of a recent pilot program in New York City. The privately funded program, which included several thousand students in 31 high schools (25 public schools and six Catholic schools, all chosen based on criteria including minority enrollment and prior student test performance), sought to encourage students to take and pass Advanced Placement exams by offering them up to $1,000 for earning passing scores on those tests.

In 2007, 4,275 students from these schools took AP exams, which are graded on a 1–5 scale with 1 being worst and 5 being the best. Of those students, 174 (4.1 percent) attained the highest score, while 403 (9.4 percent) scored 4, and 904 (21.1 percent) scored 3, the lowest passing grade. Overall, 34.6 percent of the test takers in 2007 earned passing grades.

In 2008, knowing that a good score could mean a lot of money, 4,620 students took the exams. Of those, 207 (4.5 percent) scored 5, 398 (8.6 percent) scored 4, and 871 (18.9 percent) scored 3. So, just on the surface — and in the absence of any additional information — the monetary incentive seems to have encouraged an additional 345 students to take the test, as well as spurring a slight increase in the percentage of test takers earning the highest possible score. But the rest of the story is that a smaller percentage of these schools’ 2008 test takers (32 percent) performed well enough to pass.

This was just the first year for this incentive program, and the monetary incentives were announced after the school year had already begun and class assignments were set, so it’s hard to say whether we can learn much of anything from these results. While I know that the idea of paying students for academic performance is somewhat controversial, as a matter of theory I do believe that these sorts of financial incentives are likely to lead to improved student performance. I am also aware that theory does not always translate into reality, so I will be very interested to see future studies assessing the impact of this and similar programs.

What do you think about rewarding students for academic performance?