2003

Abstract
This paper reports about a randomized field experiment in which first year economics and business students at the University of Amsterdam could earn financial rewards for passing the first year requirements before the start of their second academic year. The rewards were equal to € 227 or € 681. Before the start of the experiment students expected that the possibility to earn a reward would increase their passing rate by 0.07 for the low reward and 0.16 for the high reward. After the experiment 21 percent of the low reward-group and 37 percent of the high reward-group indicated that the reward increased their study effort. Contrary to these expectations and perceptions, the experiment痴 results show no di.erence in e.ort and in achievement between students in the two reward groups and the control group.

Key words: financial incentives, student achievement, randomized social experiment, university education
JEL Codes: I21, I22, J24