There's a fine line between an incentive and a bribe.
Recently, one of my sons was having difficulty falling to sleep in his bed at night without an adult in the next room. A person with lots of experience with kids suggested we try offering him a carrot, a little reward for fighting his fear. It worked.
Turns out it was just the nudge he needed for a breakthrough. It got the job done much better than shame or punishment.
I thought about that experiment last week when I talked to Gregg Rader, a 21-year-old junior at the University of Tennessee at Knoxville.
Rader, a graduate of Knoxville's Bearden High School, recently won a national economics contest for a proposal to improve public schools by paying high-school students cash rewards.
Performance pay for students is a controversial topic, but it's gaining traction among some economists who believe it might be the most efficient way to jump-start American competitiveness.
Last month, economists at a Washington, D.C., symposium, sponsored by the Pearson educational publishing company, chose Rader's proposal as the best from among 12 finalists in the Future Economics Insider competition. Other contestants had proposals for curbing health-care costs, ending government subsidies for ethanol and pushing high-speed rail projects, Rader said.
Rader said he believes his cash-for-grades idea could attract bipartisan support in Washington.
"It's a very new and cutting-edge idea," Rader said in a telephone interview. "I think there are people on the right and the left that could support this."
He said a study by a Harvard University economist showed that paying kids who perform better in school is just as effective as Head Start-type programs or merit pay for teachers in boosting student outcomes. Real, inflation-adjusted spending per student for public education has doubled since 1970, while test scores have languished, Radar said.
Rader proposes a national experiment involving a cross-section of American high schools. One test group of students would be paid for making better grades or scoring higher on standardized tests, he said. Another test group would earn rewards for merely improving their study habits, such as reading more books, completing projects or maintaining good behavior. A third group would use a mix of these incentives.
Radar says the amount of money available to each student in the test would be modest, perhaps $400 to $600 per year, but he believes the results might be substantial.
Since Rader has only been out of high school for a few years, I asked him if paying for performance would have helped some of his classmates at Bearden High.
"I think a lot of kids it would have helped," he said. "For the average student, it would be a good motivator. At least they might say, 'I'm going to do my homework. I'm going to go to class.'''
He says Tennessee's Hope Scholarships, which pay up to $4,000 a year in college expenses, only energize those students at the margins - those striving for the 3.0 grade point average that triggers the award. Students at the low and high ends of the grade spectrum have less incentive to improve, he said.
I asked Rader, a gifted thinker at 21, if he was optimistic about America's economic future.
"I'm optimistic about American's long-term future," he said. "But I agree with those economists who say these are uncertain times, and we should remain humble about what we think we know."