DRI Working Paper No. 102
By Rajeev Dehejia, Melody M. Chao, Anirban Mukhopadhyay, and Sujata Visaria
In an experiment in non-formal schools in Indian slums, an incentive for attending a target number of school days increased average attendance when the incentive was in place, but had heterogeneous effects after it was removed. Among students with high baseline attendance, the post-incentive attendance returned to previous levels and test scores were unaffected. Among students with low baseline attendance, post-incentive attendance dropped even below previous levels, and test scores decreased. These students also reported lower interest in school material and lower expectations of themselves. Thus incentives might have unintended negative consequences in the long term for the very students they are most expected to help.