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Scholarships for Achievers and Cash Rewards for Weak Students Don't Really Work

Merit schol­ar­ships for high achiev­ers have long been a fea­ture of col­lege life, but most merit schol­ar­ship recip­i­ents are, by def­i­n­i­tion, stu­dents who could be expected to do rea­son­ably well with or with­out schol­ar­ship sup­port. Performance-based awards for weak stu­dents are a rel­a­tively new devel­op­ment. Angrist, Oreopoulos, and Williams eval­u­ate the effects of aca­d­e­mic achieve­ment awards for first and second-year col­lege stu­dents on a Canadian com­muter cam­pus. The award scheme offered lin­ear cash incen­tives for course grades above 70. Awards were paid every term, and pro­gram par­tic­i­pants also had access to peer advis­ing by upper­class­men. Program engage­ment appears to have been high but over­all treat­ment effects were small. The inter­ven­tion increased the num­ber of courses graded above 70 and points earned above 70 for second-year stu­dents, but there was no sig­nif­i­cant effect on over­all GPA. Results are some­what stronger for a sub­sam­ple that cor­rectly described the pro­gram rules.

http://seii.mit.edu/research/study/when-opportunity-knocks/