How to make up for the Covid learning loss

It turns out there’s a way to improve student learning that even grumpy teenagers won’t complain about: Give them financial incentives to study hard.

Parents go to work even if they don’t want to because they get paid. For the same reason, students will show up on time, do their homework, and pay attention in class, even if they’d rather play video games.

In the late 2000s, I tested this concept in a series of randomized experiments in Chicago, Dallas, Houston, New York, and Washington, DC. In all, my research team distributed $15 million to approximately 36,000 students in approximately 290 schools. We have found that carefully designed incentives can encourage children to work harder and progress faster.

The trick is not to pay for an end result like a grade or test score. What worked was incentivizing the most important inputs—the behaviors and habits that lead to good outcomes later on. Paying students to read books (and passing simple tests to verify that reading has taken place) has greatly improved reading comprehension. Even more successful was the reward for mastering math goals. Paying students based on attendance, good behavior, and completion of homework generally increased performance.

There are probably several reasons why targeting inputs is more effective than targeting outcomes. For one, inputs are more directly under the students’ control and lead to predictable rewards. There is no risk of trying too hard, still failing the big test and not earning the reward. Second, not all students know how to do best on a test, so telling them exactly what to do and paying them to do it—read books, come to class, Do homework.

Some may fear that paying students to study will teach them to only learn when they are paid. But my research team found that student achievement remained high even after we removed our incentives. There is no evidence that we have negatively impacted students’ willingness to learn, but there is good evidence that we may have increased their economic mobility. Others wonder if students could use the money to engage in self-destructive behavior. However, our work has shown that students spend less and save more on things like entertainment and clothing.

It didn’t take a lot of money to make a real difference. Rewards were given in $2 increments for every contribution — every book read, class attended, homework completed. But the more you pay, the more hassle you get. When we randomly increased incentives in Houston from $2 to $6—a tripling—the student effort also nearly tripled.

Other research has devised other ways to make incentives more effective. For example, rewards are more effective when they are given in a timely manner. Financial rewards work best for older students, while younger children also respond to other incentives such as trophies.

Adjusted for inflation, monetary incentives at the levels I studied could average $700 per student for a full year. U.S. public schools currently spend more than $13,000 per student on average, a change of only about 5%. To control costs, funding for such a program could be targeted to the neediest students and schools whose parents do not have the resources to distribute bonuses for exemplary behavior. Some schools may be able to implement the program using federal Covid relief funds or fundraising from the community. The return on investment is higher than most other educational reforms that have been rigorously evaluated, including charter schools or reducing class sizes.

To cope with the unique learning loss in the wake of Covid, it may be wise to provide financial incentives to other people in students’ lives. For example, there is evidence that incentives for parents and teachers can also improve student achievement. Parents could be paid to attend parenting classes or to make sure their children do their homework. Teachers could be paid based on the learning achievements of their students.

Two years after the first lockdowns, the situation is urgent. Each year, more students graduate from high school less prepared for the challenges ahead than they could have been. We must compensate for these losses for the remaining children as soon as possible. Simple financial incentives could prove to be an important, scalable tool to achieve this.

Mr. Fryer is a John A. Paulson Fellow at the Manhattan Institute and Professor of Economics at Harvard University and the founder of Equal Opportunity Ventures.