CAREER: Using Information and Incentives to Promote Human Capital

Project Outcomes Statement

How can we help disadvantaged populations lead healthier lives and invest more in education? This five-year project addressed that question through four field experiments, using randomized controlled trials to test whether financial incentives and targeted information can improve outcomes for low-income populations in the U.S., India, and Malawi.

The first project tested whether personalizing financial incentive contracts for exercise could outperform a one-size-fits-all approach among people with diabetes in India. Our primary personalization method was inspired by mechanism design: we offered participants a menu of contract options designed to get them to sort themselves into the contract that would work best for them. This approach increased the treatment effect of incentives by 80% without increasing program costs, and performed as well as personalization based on an extensive set of observable variables, which would have been much more difficult to implement at scale. This paper was accepted at Econometrica.

The second project studied how to dynamically personalize incentives for patients in treatment for opioid use disorder in New York. We tested "de-escalating" schemes, where failing a drug test today increases the payment for passing the next one, against more standard escalating schemes. While escalating schemes were more motivating in the short-term, de-escalating schemes were better at preventing downward spirals of continuous failures, which is especially important in addiction treatment. The project also produced some of the first causal evidence on the link between opioid use and labor market outcomes, delivered through a scalable mobile app platform.

The third project asked: how do parents allocate educational investments among their children? A field experiment in Malawi found that parents are willing to give up nearly 50% of the total financial returns to their investment in order to achieve equality between their children --- and that what they care about is equality of opportunity (equal inputs), not equality of outcomes. This has real implications for how education policies play out in practice. This paper was published in the American Economic Journal: Applied Economics.

The fourth project examined whether families of children receiving SSI (a U.S. cash welfare program) underinvest in their kids' education because they expect benefits to continue into adulthood. We found that they do not: even after receiving information that decreased their expected future benefits, parents did not reduce their educational investments. This is good news for proponents of the social safety net, suggesting it does not discourage human capital investment. This paper was published in the American Economic Review.

Beyond the research, the projects trained a number of pre-doctoral research assistants and field staff, with a particular focus on supporting women and underrepresented students. Findings were disseminated through academic conferences, podcasts, policy briefs, and stakeholder meetings.