BEHAVIORAL ECONOMICS IN EDUCATION
Understanding decision-making to create an educational environment
where children have the best opportunity to shape their futures
Busara capitalizes on the proven success of behavioral interventions in the education space to develop a wide range of innovations:
• Increasing pupil attendance
• Improving teacher performance
• Altering attitudes to education
• Increasing enrollment rates
• Optimizing educational content
WHY EDUCATION MATTERS TO US
Education is key to increasing incomes, improving health outcomes, and enabling individuals to live free and independent lives. Average earnings increase by 10 percent for each school year a person has completed, better educated women have healthier children, and better educated populations drive economic growth.
Although there have been significant successes in increasing educational enrollment and outcomes across the world, major challenges remain; the global school dropout rate has not fallen since 2000 and 123 million 15-24 year olds around the world lack basic reading and writing skills.
We believe behavioral economics has a major role to play in the fight to improve children’s education around the world. Many of the barriers preventing children from achieving their potential can be overcome using the behavioral solutions we have developed through our research and consulting services.
HOW BEHAVIORAL ECONOMICS CAN HELP
Organizations and governments around the world have benefited from the power of behavioral interventions in enhancing education outcomes.
MICRO-INCENTIVES: DE-WORMING IN KENYA
Offering free de-worming treatment in Kenyan primary schools led not only to improvements in health but also a 25% reduction in school absenteeism. This has proven to be among the most cost effective ways to boost school enrollment, at only $3.50 for each extra year of schooling.
PEER EFFECTS: CASH TRANSFERS IN COLOMBIA
Cash payments to families whose children regularly attend school were found to increase school attendance significantly in a study of low-income families in Colombia. Yet children whose friends received the cash payments also increased their attendance by the same amount, even if they did not receive a cash payment themselves.
COMMITMENT DEVICES: SAVINGS MECHANISMS IN UGANDA
A study in Uganda shows that parents who commit to putting aside certain amounts of money for education spend more on educational resources than their peers without access to the savings device while their children do better in school. This effect persists even when the parents can withdraw the savings in cash, enabling them to spend on any good, not just education.
FRAMING AND LOSS AVERSION: PERFORMANCE PAY IN CHICAGO
Well-designed performance pay can incentivize teachers to do more to improve student outcomes. An experiment in Chicago’s public schools found that giving teachers their performance bonuses up-front and removing them if students do not meet standards (rather than giving the bonuses at the end of the year if students do meet the standards) increased student test scores enormously, raising their performance by 7-10 percentile points compared to their peers.
Contact us to learn more about Busara’s work in education.