Have you ever thought you should be paid to go to school? After all, you spend many hours per day there and you are working. Believe it or not, there are places where students have incentives to stay in school. Incentives produce positive and negative motivation for desired actions or behavior.


In this lesson, you will analyze some key elements of different stay-in-school incentive programs, explore why these programs exist, identify reasons why disincentive programs may be as effective as incentive programs, and develop an incentive program for a specific group of students.


There are many different economic incentive programs in the United States encouraging students to stay in school. Some programs are offered by local school districts and others are offered by state and national organizations. Some are even offered by professional sports teams. They are structured differently and offer different incentives but the goal remains the same: to keep students in school.

In Oakland, California, the Oakland Unified School District has an incentive program known as the Oakland Technology Exchange. Students learn about and recycle computers that are obsolete by current business standards and earn credits that are redeemable for take-home computers. Read about the Oakland Technology Exchange .

After reading the article, test yourself to see how well you retained the information by answering the following questions in the Self Check Activity:


In many parts of the United States, dropout rates are high for minority students. With this in mind, the NAACP created the Back-to-School/Stay-in-School Program with the goal of increasing numbers of skilled and literate African American students graduating from high school. Answer the following questions after reading about the Back-to-School/Stay-in-School program.


  1. What does Project R.E.A.C.H. stand for?
  2. What does this program provide beside incentives?
  3. What is the range of ages for which this program is available?

Since many students are fans of professional sports teams, it seems logical that incentives related to sports teams would be well received by students. Read about the Los Angeles Clippers' Stay In School Program and answer the following questions.

  1. How many school districts in the greater Los Angeles area participate in the program?
  2. Which students participate in the program?
  3. What do the students have to do to be a Grand Prize winner?
  4. What do the Grand Prize winners receive?
  5. What do all these programs have in common?


Stay-in-school incentive programs are becoming more popular and are being instituted in more and more areas. Please answer the following questions:


  1. Why do you think these programs are being developed?
  2. From a student's point of view, what are some of the major reasons to stay in school?
  3. From a community, state or national perspective, what are some reasons why we want students to stay in school?

To understand why it pays to improve your human capital, take a look at "Working in the 21st Century " form the Bureau of Labor Statistics. While looking at the graph answer the following questions:

  1. What are the average weekly earnings of a high school graduate?
  2. What are the average weekly earnings of a worker without a high school diploma?
  3. What would be the yearly difference between two average workers in each category?

As you can see, a definite correlation exists between higher education and earnings with an average college graduate earning more than double what a high school dropout would earn.

In addition to the earnings differential, there exists an inverse or opposite relationship between unemployment and level of education.

  1. What is the average unemployment rate of a worker with a high school diploma?
  2. Discuss why you think workers with less education have a higher unemployment rate?

From the previous discussion, you can see that students who stay in school can benefit economically both now and in the future.

In addition to the economic incentives discussed above, some cities and states have attempted to deal with the dropout problem by creating economic disincentives. These disincentives can act as motivators to get students to stay in school, not through a reward system but through negative consequences.

Most states require students to attend school until they reach a certain age. If students don't attend school, they can be fined or face other penalties. A recent trend is to fine parents if students don't attend classes.

In addition to mandatory attendance policies, some states are now tying driver's licenses to school attendance. Many new programs require a school official to sign a statement verifying student attendance before the student in question can get and keep a driver's license. Do you think this new practice will be effective? Why? Check to see whether you have any of these disincentive programs in your area.


Your consulting firm has been asked by the school board of the Big City Independent School District to design an incentive program to get students to stay in school. The board is very concerned about the high dropout rate in the district.

The students most likely leave school early tend to be from minority, low-income, inner-city, single-parent homes. Many of their parents and other adult models did not finish high school.

Design an incentive program to encourage these students to stay in school. Be prepared to present and defend a list of specific recommendations to the school board.Your proposal justification should stress the economic benefits of high school graduation including why high school graduates tend to make more in salaries and wages and tend to experience less unemployment than those who do not have high school diplomas.