Abstract. 

Performance Incentives and Student Achievement: The Role of Goal Mismatch (with Pol Campos-Mercade and Erik Wengström)

Students often face incentives to reach performance goals, such as receiving a scholarship, entering a college, or being hired for a job. This paper uses a field experiment to study how financial incentives to reach performance goals affect students, whether the effects vary for students at different parts of the performance distribution, and whether allowing students to choose their goals improves their performance. We find that incentives backfire: students who were offered incentives perform worse than their control counterparts. Mismatched goals mainly drive these adverse effects: the negative treatment effects are concentrated among students with high aspirations who were given a low goal and students with low aspirations who were given a high goal. The effects are also negative but not statistically significant from zero when students can choose their own goals. Our results show that incentives for performance goals can harm students’ performance, especially if the goals are not aligned with students’ motivation, aspirations, and baseline achievement.