The Benefits of Paying Your Child for Good Grades

Money is a lot of people’s biggest motivator, and bribing kids is nothing new. But is it actually effective? This episode of the Freakonomics podcast is about whether it’s worth it to pay kids to do well in school.

The episode focuses on a study by Steven D. Levitt, John A. List, Susanne Neckermann, and Sally Sadoff that found students in low-performing schools in Chicago did better on tests when they were promised money or trophies in return for getting good grades.


Levitt gets into the details of  how they came to that conclusion. The study tested the effect of both the financial and non-financial awards on 6,000 students. To test the effect of monetary rewards, right before a test they would tell a child, "we will give you $20 as soon as the test is over if you improve your performance compared to the last time that you took it." To test non-financial awards, they would put a trophy on a child’s desk right in front of them as they took the test and if they didn’t do well they would take the trophy away. Levitt and his team found that trophies worked well with the younger kids, but money was really the only working motivator for the older kids. They also found that boys, at all age levels, are much more receptive to both kinds of incentives.

Levitt says: “I think what it really comes down to, and we've seen this in many other settings, is that girls basically always try pretty hard. And when you incentivize them, they can't try that much harder. But boys basically completely slack off unless the stakes are really high.”

Bonus info: According to an August 2012 survey by the American Institute of CPAs, 48 percent of parents pay their kids for good grades, with a kid getting an average of $16.60 for an A.

If I got an A, all I got was a pat on the back.