Should We Pay Kids to Graduate from High School?
Life + Money

Should We Pay Kids to Graduate from High School?

iStockphoto/The Fiscal Times

The U.S. government spends vast sums of money every year in efforts, both explicit and implicit, to increase economic mobility, but has little success. It remains extremely difficult for someone born on a lower rung of the economic ladder to ascend to middle class.

A new study from researchers at the American Enterprise Institute proposes redirecting funding from existing programs to create a “milestone” credit in the form of a cash payment to students who graduate from high school, and tying aid to families to a requirement that children remain in school.

Related: The Mobility Myth and Other Income Inequality Surprises

“High school dropout rates are highly correlated with low upward mobility,” note authors Aparna Mathur and Abby McCloskey. They report the finding that more than 30 percent of households headed by a person without a high school diploma or its equivalent live in poverty, a figure that drops below 10 percent for families headed by high school graduates.

Because children at risk of dropping out of high school often come from families that are disengaged from the educational system, Mathur and McCloskey suggest that creating a program that directly incentivizes the student himself or herself might be an effective method of increasing graduation rates.

Citing a “growing body of research on using financial incentives to motivate educational goals,” they recommend a controversial pilot program to test their theory. Unfortunately, they don’t recommend an amount that they believe would provide the necessary motivation.

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