Should we pay people to act in their own best interest? That question occurred to me when looking at a report on the Advanced Placement Inventive Program (APIP). This program offers cash incentives to students and teachers in inner city minority schools for passing scores on Advanced Placement exams, on the grounds that this will make them more likely to succeed in college and place them in positions to earn higher incomes later in life. According to the analysis of C. Kirabo Jackson of Northwestern University, participants in the APIP were more likely to graduate from college and to earn higher wages later in life.
I’m not surprised by the fact that you can motivate people by paying them. But to the extent that motivation can produce better outcomes for students, this must mean that poor outcomes were not the result of barriers or discrimination but of lack of motivation. So, those who lack motivation to achieve should be paid to get ahead. Why? So that they will be paid even more throughout their lives.
The report does say that 70% funding for APIP comes from private donors. But that still leaves 30% paid by school districts. Private donors, of course, can donate their money however they like. But it seems strange to me that taxpayers are paying under-motivated students to improve their own lives, especially when (a) there are plenty of jobs at the bottom of the labor market that need to be filled, and (b) some of those taxpayers may be paying to motivate other people’s children to compete for a limited set of economic opportunities with those taxpayers’ own highly motivated children.
So, the author looks at one important question about this kind of program: does it work? But there is another, more essential question: even if it does work, does it make sense?