TY  - JOUR
AU  - Dee,Thomas
TI  - Conditional Cash Penalties in Education: Evidence from the Learnfare Experiment
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15126
PY  - 2009
Y2  - July 2009
UR  - http://www.nber.org/papers/w15126
L1  - http://www.nber.org/papers/w15126.pdf
N1  - Author contact info:
Thomas Dee
Frank Batten School of Leadership and Public Polic
and Department of Economics
University of Virginia
235 McCormick Road
P.O. Box 400893
Charlottesville, VA 22903
Tel: 434/243-3731
Fax: 434/243-6858
E-Mail: dee@virginia.edu
AB  - Wisconsin’s influential Learnfare initiative is a conditional cash penalty program that sanctions a family’s welfare grant when covered teens fail to meet school attendance targets. In the presence of reference-dependent preferences, Learnfare provides uniquely powerful financial incentives for student performance. However, a 10-county random-assignment evaluation suggested that Learnfare had no sustained effects on school enrollment and attendance. This study evaluates the data from this randomized field experiment. In Milwaukee County, the Learnfare procedures were poorly implemented and the random-assignment process failed to produce balanced baseline traits. However, in the nine remaining counties, Learnfare increased school enrollment by 3.7 percent (effect size = 0.08) and attendance by 4.5 percent (effect size = 0.10). The hypothesis of a common treatment effect sustained throughout the six-semester study period could not be rejected. These effects were larger among subgroups at risk for dropping out of school (e.g., baseline dropouts, those over age for grade). For example, these heterogeneous treatment effects imply that Learnfare closed the enrollment gap between baseline dropouts and school attendees by 41 percent. These results suggest that well-designed financial incentives can be an effective mechanism for improving the school persistence of at-risk students at scale.
ER  -