The Why Axis: Hidden Motives and the Undiscovered Economics of Everyday Life (12 page)

Do Bribes Work?

Urail King was a fourteen-year-old, black ninth grader at Bloom Trail High School in Chicago Heights. His mom, Theresa, hadn’t graduated from high school. Urail was energetic, extroverted, and smart, but school wasn’t really his thing, either. Urail’s grades hovered between Ds and Cs. He didn’t overtly cheat, but he cut corners: instead of reading
To Kill a Mockingbird
cover to cover, he tried to figure out the answers on a quiz by scanning the pages. Urail was right on the borderline. He could choose to make an effort to succeed in school, or he could follow a more negative trajectory.

Another ninth-grade student, Kevin Muncy, was a white kid with short, dark hair and a rhinestone stud in his ear. He loved to skateboard, play video games, and invent things. He was smart and innovative: he impressed girls with a self-made tattoo he’d created with a gadget he’d invented combining an electric toothbrush and a chopped-off guitar string. His mom worked in the bakery section of a grocery store. Kevin preferred to hang out with his friends rather than worry about school. In his classes, he fiddled with a small gaming device under his desk and tried to find fellow students who could help him cheat. Kevin thought he’d like to graduate from high school, but his failing grades weren’t going to get him very far. If he didn’t graduate, he figured he’d sign up for the military and get his GED while enlisted.

What kinds of incentives would it take to get these two under-achievers to succeed in school? Would paying Urail and Kevin, or their parents, to perform make sense? Before rejecting this idea out of hand, let’s consider how we usually get people to do what
we want them to do. To get people to recycle more or to buy environmentally friendly cars, we reward them with financial incentives. Could paying students to perform better work, too?

When we took our idea about paying students for performance to the school board of Chicago Heights, it was met with something close to scorn. After all, most grown-ups agree that students should learn for the sake of learning. But the brutal fact is this: millions of kids in public schools just do not see it that way. As we pointed out to the school board, kids should clean up their rooms, but they don’t. They should brush their teeth and always obey their parents, but they don’t. They should eat fruit instead of cookies, but they don’t. And they should like to learn, but often, they don’t.

The realism of our argument hit home when a school board member cited research showing that extrinsic incentives, like money, can crowd out intrinsic incentives like enjoying learning and doing well in school. (Sound familiar? He was basically citing some of the psychology and economics research, including our own, we discussed in
Chapter 1
.) We agreed on the importance of intrinsic incentives and with the spirit of those studies, but we swiftly replied that when there is nothing to crowd out, money talks. We were met with a sigh from the board members who, after all, knew that their district was in dire straits. They grudgingly admitted that they were willing to try anything that stood half a chance of succeeding.

Because monetary incentives in education are so controversial, it’s not yet fully known how best to direct them.
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Our first idea was to shift the incentives to the near term: rather than paying students at the end of the semester or year for good performance, we would pay them closer to the moment of achievement, thus satisfying their desire for immediate gratification. (As we said
above, behavioral economists have shown that many people respond much more dramatically to incentives paid earlier rather than later.)

Our second behaviorally based idea was to use a lottery to pay the students. A lottery is a terrific behavioral testing tool, because human beings tend to overweigh low-probability events. For example, the chance of winning a state Powerball lottery is typically lower than one in a million, but people love to play anyway, in part because they believe the odds are better than they really are. (In reality, you’re more likely to be struck by lightning than to win a Powerball lottery in most states.) We thought that if we could offer rewards through a lottery, where the prize was large but the chances of winning were small, the rewards would seem more relevant; students might overweigh their chances of winning the lottery, inducing them to try harder.

The final idea was an obvious, whack-on-the-side-of-the-head one that stems from trying to figure out what goes into the education “production function”: use incentives to get parents involved, and see how their involvement affects their kids’ performance. We figured that paying parents would not only work, but that doing so would tell us more about the most effective ways to increase achievement. Getting parents more involved in helping their children study might help siblings, too. After all, once parents start working with one child, it’s only fair to do the same with the others.

We just had one problem, and it was a big one. Pulling off a field experiment to test these ideas would not be easy. And, it would cost large sums of money that we simply didn’t have.

The Griffin Gift

Right around this time—in the spring of 2008—we received a serendipitous phone call from a couple of philanthropists, Kenneth and
Anne Griffin. Kenneth Griffin is the founder of Citadel, one of the world’s largest hedge funds, and he and his wife were interested in our research. They were looking for help in setting up a charitable foundation, and wondered whether we could possibly meet with them to discuss our work. We had no idea the call would change our lives.

We drove to the Citadel building in downtown Chicago, a gigantic, steel-and-glass tower, with 1.4 million square feet of office space, set right in the economic center of the city. After passing through the marble-walled lobby, we entered the elevator and pressed the button for the thirty-seventh floor. Our ears popped, and we felt a bit nervous. The elevator hushed open, and a nice receptionist ushered us into a tastefully decorated conference room. She offered us coffee, and we waited.

When the Griffins entered the room, our first take was that they looked like one of those gorgeous couples whose nuptial photos you find gracing the pages of the
New York Times
’ Sunday Styles section. Kenneth, good-looking and incisive, is a brilliant entrepreneurial type; a product of public schools, he learned all about trading within the confines of his college dorm room. Anne, a French native who speaks five languages, is, like her husband, also a product of a public school system, and her mother was a teacher.

We had little idea what we had gotten ourselves into. Most well-intended, wealthy donors we knew wrote a big check for research and, with a flourish of the pen, said something like “You can talk about your results at my next dinner party.” But the Griffins were different.

We launched into some theories of behavioral economics, summarized a bit of our research, and walked through our ideas about what kinds of incentives might work with the Chicago Heights school kids. As we talked, their eyes lit up.

Even though a few hours of the Griffins’ time is probably worth tens of thousands of dollars, they spent a long time meticulously
working through our experimental ideas, surprising us with their knowledge and insight. “Why do you think people overweigh small probabilities?” they asked us. “Why do you think so many young people don’t think graduating matters?” Both Kenneth and Anne grilled us and sharpened our ideas with thoughts of their own. Like us, they wanted whatever interventions we came up with to be scalable, firmly grounded in theory, and cost-effective.

The Griffins soon became our full research partners. They passionately believe in bettering America’s public education system, understanding that doing so is the only way to improve people’s lives and the economy in general. They wanted to get up to their elbows in interventions that could help urban kids overcome the education gap and raise American educational standards in general.

By the time we left the room, we were convinced of one thing: had they gone the academic route, both Ken and Anne would have been our research equals and then some. We departed with a solid experimental design on our hands, and within twenty-four hours, the Griffins gave us the initial $400,000 we needed to run the experiment.

Before we entered the room that day, Ken and Anne knew how they wanted to change the world; we were fortunate enough to show up in the right place at the right time. Suddenly we understood how Columbus must have felt when Queen Isabella gave him the resources to find the New World. We not only found donors, but two new friends; indeed, our new colleagues would help us tackle one of the most important problems facing America today.

The Voyage to Public Schools

One day, a kind, slim redhead with the gentle demeanor of a good high school counselor called Kevin Muncy into her office. Her
name was Sally Sadoff, and at the time she was one of our graduate students administering our experiment.
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When Kevin came in, Sally smiled broadly at him. “How’s it been, starting in a new school?”

“I like it. It’s really easy.”

“The classes are really easy? Let’s see what your report card says.” She scanned Kevin’s awful grades. “So Kevin,” Sally asked kindly, “what do you need to improve on?”

“Everything.”

“So you probably want to know what you can get if you meet the new monthly achievement standards—no unexcused absences, no daylong suspensions, and grades of C or higher in all your classes. Right?” She pulled out a folder and handed it to him.

Kevin opened the folder. “Fifty bucks?”

Sally smiled. “And you get $50 every month as long as you keep your grades up!”

“I think a lot of people will start doing their homework then.”

“But what about you?”

Kevin began to dream a little. “What could I do with $50 a month? I could pay for my skateboards. Get sponsors and clothes and stuff until I graduate.” On hearing about this incentive, Kevin’s mom doubled it: if he raised his grades to the monthly standards, he could earn $100 a month.

But there were more incentives, and Sally made a big deal of them. In fact, we pulled out all the stops we could think of. At the end of each month during the eight-month program, the kids all lined up in the school cafeteria for free pizza and the big payout. Each one was called up to a table where Sally and the other researchers looked over their grades and talked with them. If they (or their parents, depending on the experimental treatment) won the cash payout, they walked away grinning—and not just because of the cash.

Even more fun was the big, suspenseful bingo-ball-style lottery. Each month, we drew ten names. If a student who met the standards
criteria won, he or she (or their parents, depending on the treatment) would take home the grand prize: $500 in cash (as well as a giant Ed McMahon–style pseudocheck) plus a ride home in a white, chauffeur-driven Hummer stretch limo, complete with comfy leather seats, tiny blue and green interior lights, TV consoles, ice compartments, and all the other trimmings. When Urail King saw the limo, he went wild. “Oh my G-o-d!” he shouted. “This is awesome! Oh yes, yes, you are getting straight As from me! Take me home, Jenkins!”
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If the kids didn’t meet the monthly standards, Sally and the other researchers would make suggestions for catching up. The researchers even gave the students reminder calls during the month to ask them how they were doing in their classes. And, of course, the parents encouraged the kids and worked with them, too. After all, who would not want their kid to win the grand prize?

So how did the students and their parents respond to all these expensive incentives? Given the wiring of teenage brains (“I want what I want
now
”), was it too much to ask the students to wait a month to receive their rewards?

Our overall results showed interesting gains.
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We estimated that the program helped about 50 borderline students out of the 400 in the experimental group to meet the ninth-grade achievement standards. Among the students who were on the brink of failing, we figured the program had increased achievement by about 40 percent. Happily, these students continued to outperform their un-incentivized peers after the program ended in their sophomore year. In fact, our estimates suggested that about forty kids who would otherwise have dropped out would receive their diplomas because of our program. (We also found that students’ performance increased slightly more if their parents, rather than they, received the reward.)

Given that every additional year of secondary schooling increases lifetime earnings by 12 percent, offering such students an incentive during their freshman year seemed to be a clear, cost-effective intervention. If you also count the fact that the kids spent their time in school, rather than dropping out and hanging around the streets, the program was that much more successful. We had found a way to reach a slice of the kids on the brink—but only a slice.