(NewsNation) — Exacerbated by widespread school closures and remote instruction, pandemic-era learning loss has had devastating consequences for American students. In some cases, students are more than a year behind where they should be, and those in high-poverty districts are even worse off than most.

As districts respond to the challenges brought on by learning loss, one possible approach would be to offer financial incentives to students in order to boost their motivation.

That’s an idea proposed by Roland Freyer, who is the John A. Paulson Fellow at the Manhattan Institute and a professor of economics at Harvard University, in a recent op-ed. Freyer has spent much of his life conducting research on the American educational system, and one intervention he tested years ago may be relevant to tackling pandemic-era learning loss.

Freyer ran experiments funded by private donations in multiple cities in which students were offered small cash payments in exchange for improving certain academic-related behaviors such as good attendance and completing their homework. What he found was these payments made a real difference in student effort and boosted overall achievement, as measured through grades and test scores.

In Dallas, for instance, second-grade students were paid $2 for reading a book and then completing a short quiz about that book. The resulting increase in student achievement from this intervention was equivalent to more than two months of schooling.

NewsNation spoke with Freyer about how using financial incentives could help tackle learning loss. The interview has been edited for length and clarity.

NewsNation: Explain the research you conducted on financial incentives for students. What did you find?

Freyer: What we found is when you pay for outputs [such as higher grades], you get absolutely nothing. […] We had a sociologist who also talked to the kids … to the families so you can really understand how incentives were helping. [He] basically told us that the kids got really excited but said school’s still hard, they have no idea what to do.

Freyer (cont.): On the other hand, if you pay for inputs: reading books, turning in homework, coming to class, doing math homework, those kinds of things, those kids did exactly what we told them to do, and they crushed it. It turns out those things you told them to do, on average, were correlated with high test scores. So the irony in this is, if you pay for high test scores you get nothing. If you pay kids to read books or to do math homework, you get high test scores.

NewsNation: What do you think about the concern that paying students for academic behavior would create perverse incentives or undermine their natural desire to learn?

Freyer: You know, I just don’t see it. All the stuff where incentives destroy incentive, motivation are things that you like to do in the first place. So if you were donating blood, and you did it out of the goodness of your heart, and I start paying you incentives and I ask you to donate blood, and I stop that, you might say, hey, hey I’m not donating anymore blood unless you give me some money. Or there are other activities like that. These are, frankly, inner-city schools with low achievement. We were trying to foster a love of learning, getting them to try it and see that they can excel at it, not the other way around. We also did all the measures of intrinsic motivation, we found no effect on it whatsoever. So we didn’t foster it, and we also didn’t hurt it.

NewsNation: Do you know how the students spent the money they were given?

Freyer: Basically, what they did is they saved more. So the average kid that was in the treatment group actually saved more over the time than others, and they spent money on things like food, some for their families and some for just themselves. […] We took a lot of criticism in the early days that you know these fourth graders but for 20 more dollars are going to go buy a lot of drugs. We don’t have any evidence of that. What we have evidence of is they spent their money on normal things that youth might spend money on but more importantly to us, they actually saved more and that’s in part because … we gave them (a) financial literacy class.

NewsNation: What would it cost a school district to implement these financial incentives programs? 

Freyer: It just depends on, obviously, the amount of the incentives. I think for us we ended up, $30 or so a kid in Dallas. […] For Houston, I think the average kid made a couple hundred bucks over the year. So I think a few hundred dollars over the year is what we’re talking about. Which is, again, a tiny percentage of what we’re paying now. And we can easily afford it by canceling all the programs where we have clear evidence they don’t work.

Outside of NewsNation’s interview with Freyer, he explained in his op-ed that “monetary incentives at the level I studied might average, say, $700 per student for a whole year. Public schools in the U.S. currently spend more than $13,000 per student on average, so that reflects a change of only about 5%. To control costs, funding for such a program could be targeted to the neediest students and schools where parents don’t have the resources to dole out allowances for model behavior.”