Can financial incentives improve outcomes on standardised tests? In an unpublished paper, John List, Jeffrey Livingston and Susanne Neckermann examined whether motivating pupils to gain the knowledge needed to succeed on the International Student Admissions Test (ISAT) would result in higher test scores.
Subjects were 3rd–8th grade (Year 4–Year 9) pupils (n=226E, 226C) who were judged to be at risk of not passing the ISAT and were receiving tutoring to improve their scores in nine elementary and middle schools in a suburb outside of Chicago. Using a system designed by the ISAT’s developers, authors created short benchmark tests designed to measure the knowledge needed to be successful on the ISAT. Pupils, their parents and their tutors were informed that they would receive up to $90 if pupils’ performance improved on these benchmark tests and if they met other academic and behavioural goals.
Results showed that pupils demonstrated significant gains on the incentivised benchmark testing compared to control pupils (effect size =+0.29), indicating they had the knowledge to pass the ISAT. However, they did not demonstrate significant gains compared to controls for the ISAT itself (effect size=+0.05), for which they did not receive any financial incentive. This was true regardless of whether incentives were provided immediately or were delayed. The authors conclude that pupils may not be motivated to show what they know on standardised testing that holds no personal stake for them.
Similar results were found in a review of international experiments evaluating financial incentives in education by Robert Slavin, posted on The Best Evidence Encyclopedia. The emerging consensus is that financial incentives can have an impact on easily counted outcomes for which the incentives were directly given (such as attendance), but not on more general outcomes that should flow from the incentivised outcomes (such as achievement).
Source: Do students show what they know on standardized tests? working papers (2016), from the selected works of Jeffrey A Livingston, Bentley University