The Texas Advanced Placement Incentive Program pays both students and teachers for passing grades on Advanced Placement (AP) exams. The program was implemented in schools serving primarily low-income, minority populations. Using a difference-in-differences strategy, I find that program adoption is associated with increased AP course enrollment and AP exam taking. Moreover, the program is associated with an increase in students scoring above 1100/24 on the SAT/ACT, and an increase in students matriculating in college. I find no evidence that the rewards distorted behaviors in undesirable ways. I present empirical evidence that teachers and students were not simply aiming to maximize their rewards. This is corroborated by anecdotal evidence that the increases in AP participation were due to better access to AP courses, changes in teacher and peer norms towards AP courses, and better student information. The per-student program costs are small relative to reasonable estimates of the lifetime benefits that may accrue to affected students such that the program may ameliorate sub-optimal educational investments.
- academic incentives,
- academic performance