by Gneezy, Uri
In summary: when the right kinds of incentives are applied via the scientific method, poor kids can do just as well as rich kids within ten months.
What about the Parent Academy? Children like Gabriel whose parents are enrolled in this program have shown improvements too, and they are catching up to the national average. But they are not doing as well as the kids enrolled in either of the preschools. Still, the short-term incentives seem to be quite strong: kids who have parents in the cash treatment perform much better than those whose parents are in the college treatment.
One delightful result is that kids with parents in the Parent Academy stayed on track after the program ended. That is, they weren’t as susceptible to falling back in the summertime when they weren’t in school. So even though the kids in the Parent Academy have not increased their performance by the same margin as those in our preschools, it looks like they could outperform those kids in the long run. This is because adults enrolled in the Parent Academy now have the tools to work with their children, and to continue to work with them long after we have directly touched them. In fact, those parents who were given the long-term, college scholarship incentive invested the most in their kids during the summer.
One unanticipated data pattern showed that the lion’s share of gains across all of our programs occurred in the first few months of the program—between September and January of the first year. This result is tantalizing, because it might mean that pre-K education is most beneficial over much shorter time periods than previously believed. Importantly, it opens up the possibility of “kinder-prep” programs that can be completed in the summer months directly before kindergarten—when teachers and school space are readily available. (We are now in the first year of testing this proposition.)
The Griffins’ investment in a few years of early education has allowed children who were once consistently at the bottom of the rankings to leapfrog their way past the average. Will these effects persist? Will the impact of parental involvement eventually overtake an investment in early childhood education? Will a kinder-prep program give our kids the extra lift they need to compete in today’s global economy? Time will tell and, thanks to the Griffins, we’ll be there to find out.
Saving Public Schools
What do the following people have in common—Albert Einstein, Bill Clinton, Martin Luther King Jr., Steve Jobs, Mark Zuckerberg, Steven Spielberg, Shaquille O’Neal, Michael Jordan, and Oprah Winfrey?
They all went to public schools.
Until the 1840s, only children from wealthy families could receive an education. If that were the case today, most of the US population would probably be illiterate; and most, if not all of the people we just named might have had no work options beyond manual labor. But in the nineteenth century, something wonderful happened: public education in the United States became freely available to all children. Today, 85 percent are literate. If you think about public education in this context, you realize it has really been an amazing success.
But when you discover that kids in poor neighborhoods are graduating at the same low rate as people long ago, you know we can and should do much, much better. Public education is the only way for them to climb out of poverty and up the economic ladder. If it weren’t for public schools, many urban kids wouldn’t stand a chance. But the unfortunate fact is that such schools barely scratch the surface of what is possible, and they leave millions of children behind to endure wasted lives of grinding poverty.
What have we learned?
For decades, public education has been a source of political platitudes and mired in status-quo thinking. Despite the fact that every presidential candidate coughs up a host of ideas and surrounds himself with dozens of smart advisors who have innovative suggestions for fixing public education, nothing to date has worked. The past few decades of educational reform have shown that innovation for the sake of innovation isn’t likely to change America’s gap in educational achievement.
But down-at-the-heel Chicago Heights provides hope that there is a way out of this morass. When parents, teachers, and students from preschool to ninth grade are motivated to perform better, they do. We found that the right incentives, combined with a better behavioral framing of the context, can make a huge difference.
We now understand better how simple incentives work in education, and how, for example, framing incentives in terms of losses boosts performance. Kids respond to bribes, but they respond better to behavioral manipulations; if you give them $20 to perform well on a test and threaten to take it away if their performance isn’t up to par, students do much better.
Likewise, when teachers both (a) worked in teams and (b) were threatened with losing a large bonus they had already received, student achievement soared—effectively closing the education gap. Understanding how to reward students, parents, and teachers can raise test scores between 50 and 100 percent—putting the underprivileged kids on the same level as those from rich white neighborhoods.
If it all sounds a bit Pavlovian, it is—but it can work. And if Chicago Heights can close the education gap, then Anytown, America, certainly can too.
The Griffins understand all this, and they put their money to work—doing everything they can to ensure the kids in Chicago Heights get a solid educational platform to stand on. With their help—and, hopefully, with better interventions at the preschool and elementary school levels—we can not only graduate more urban children from high school, but also make learning exciting and fun from the get-go.
So how can we all, as a nation, go further? We must understand that schools are not just about teaching children. They are about teaching ourselves what works. So far, we’ve paid attention to only one side of this critical equation. We must all realize that our public schools are not just knowledge-pumping (or, at worst, babysitting) institutions dedicated to teaching our children to learn how to become functional citizens. In reality, they are laboratories of learning for everyone—researchers, parents, teachers, administration, and students too.
Just imagine how much we could all discover if more people began running and participating in field experiments to discover what works. If everyone who cares about public education ran such experiments, we could save enormous amounts of time, money, and heartache. We would discover which innovations are most promising, and how to apply them, before rolling them out to the entire country. The returns on a thriving K-12 educational system would be enormous for not just our children, but the United States as a whole.
In the following chapters, we’ll learn more about how field experiments can help to discover what lies behind other kinds of social inequities.
CHAPTER SIX
What Seven Words Can End Modern Discrimination?
I Don’t Really Hate You, I Just Like Money
Let’s say that after several years of building your career in marketing you took time off and went back to school for your MBA. Now, with your newly minted credential from a top university, you are in the final draw for a top job in marketing at a large multinational corporation. You and two other candidates are to meet the CEO for a final interview. Given all you know about the job and based on your extensive expertise, it seems as if you have a good chance of landing this position.
Dressed in your best suit, you feel confident as you push the elevator button to the twentieth floor. “This is it,” you say to yourself.
The elevator door swishes open; you stride up to the assistant’s desk and announce yourself. The assistant ushers you in to an enormous office outfitted handsomely with bookcases and silver-framed family photos. The CEO strides over to you, offering a meaty hand. “Take a seat,” he says, smiling.
“So,” he begins, sitting down and leaning back in his Aeron chair, “you already understand that the job is to market our new product internationally. Your resume is very impressive in this regard. I see you have spent some time working in the Middle East and Europe.”
“Yes,” you say, feeling encouraged. “I also speak several
languages, including Dutch and French.”
“Yes, I see that,” says the CEO. “It looks like you are eminently qualified. But right now we’re going to talk about you. I see that you are married and have two small children. If you have a demanding full-time job, how much time do you think you will need to devote to your family as opposed to your job? This job, after all, entails quite a bit of international travel.”
What is your answer to this question? How would you answer it as a husband and father? Or as a wife and mother?
The question and the answer might well depend on your gender. A woman is much more likely to be asked such questions than a man is. And if you are a woman, standing up for family time could well get you painted as “insufficiently committed” to the job—as Uri’s wife, Ayelet (the model for this scenario) discovered.1
In Chapters 2 and 3, we saw how gender differences work on a deeply socialized basis, and how notions about competition affect women’s opportunities. In Chapters 4 and 5, we saw how children from poor neighborhoods suffer from educational inequities.
Now, let’s think more broadly about the effects of discrimination beyond gender and poverty: What about racism, homophobia, and other forms of prejudice? What causes them? Are all forms of discrimination rooted in antipathy toward others, or are other things going on?
In this and the next chapter, we will walk through a series of field experiments in which we tease out the distinctions. We’ll look more closely at discrimination in general: how it affects markets, and how it affects you. We’ll show you how field experiments have helped us to sort out various kinds of discrimination in the world. This is important because, while examining raw data in the traditional way can show us how much discrimination is occurring in a given market, that approach cannot show us what kind of discrimination is at work and what kinds of incentives might underlie it. Understanding the incentives behind discrimination is critical if we, as a society, are going to bring an end to it.
The Faces of Discrimination
Consider the following:
•A black man shopping for a car is quoted a higher price than a white man.
•A salesman ignores a gay couple shopping for a car.
•A disabled person is quoted a higher price for a car repair than an able-bodied person.
•A black man asking for directions on a busy street corner is given the wrong directions, whereas a white woman is given the correct ones.
•A pregnant woman angling for a promotion at work is passed over in favor of a man with her same skills.
If you’ve been in situations similar to these, you may feel angry, frustrated, or even outraged. But what can and what should we do to eliminate such biases?
A first step is to understand why people discriminate. What incentives are bigots following? Once we know the answer to this question, then we can combat discrimination with our own personal actions and with new laws.
Consider the case of anti-Semitism, which has had a long, ugly history in the world, including in the United States. For example, during the Civil War, Ulysses S. Grant issued an order—rescinded by Abraham Lincoln—expelling Jews from parts of Tennessee, Kentucky, and Mississippi.2 In the first half of the twentieth century, Jews had trouble getting many jobs. They weren’t allowed into the New York Athletic Club or other elite social clubs. Ivy League universities limited the number of Jewish students they accepted. The Ku Klux Klan and the popular radio speeches of the Catholic priest Father Coughlin incited attacks against Jews. The number of Jews allowed into the country was limited; during the Holocaust, America turned away ships bearing refugees from the Nazis. Henry Ford spoke out loudly against the “Jew Threat,” and blamed World War I on them. Right-wing ideologues asserted that Jews dominated Franklin Roosevelt’s administration.3
This kind of discrimination affected not only immigrants and Jews, of course; in many places it has been deeply embedded in cultural history the world over. Think of apartheid in South Africa, of the genocide in Rwanda, of the treatment of indigenous people in Australia and America, and of former slaves (and their descendants) in the United States—the list of humiliations and atrocities is endless.
It was into this anti-Semitic environment that a Jewish man named Gary Becker—the man who has arguably done the most to further our understanding of discrimination in modern times—made his entrance.
Gary Becker was born in 1930 in the coal-mining town of Pottsville, Pennsylvania, and was raised in New York City, where his entrepreneurial father Louis owned a successful wholesale and retail music business. Neither of his parents received an education past the eighth grade, and though his house didn’t have many books, it was always filled with lively discussion about current events. “My father was an independent spirit and a strong supporter of Roosevelt,” Becker explains. “We would talk about politics and social justice issues—rent control, taxation, the treatment of blacks in the south, and how to help the poor.”
At the time, New York had the largest Jewish community in the country, but that didn’t protect the family from anti-Semitism. They were the targets of racial slurs. Becker’s brother, who had obtained a degree in chemical engineering from MIT, tried to land career positions in chemical firms but could not get promoted, so he founded his own firm. Although discrimination sometimes kept Jews from getting ahead, says Becker, “my father often said that if you worked hard you could overcome it.”
Becker worked hard enough in school to be admitted to Princeton, thinking he would study mathematics. But he also had a strong interest in contributing to society. He happened to take an economics course his freshman year, and he got hooked. He developed the wild and crazy idea of somehow combining economics with his interest in social problems. After graduation, he went on to the University of Chicago, where he became a student of Milton Friedman, who saw in Becker a glimpse of genius.
Becker began studying the economics of discrimination. “I had a feeling discrimination wasn’t one, simple thing,” he recalls. “It’s manifested in many ways, including earnings and employment. For example, if an employer was prejudiced against black workers, what did that mean for the black workers compared to equally skilled whites?”
Becker saw a way of identifying the prejudices of workers, employers, customers, and all kinds of other groups and putting them through the blender of economic analysis. In a sense, what Becker did was to identify the incentives that make people discriminate. “But I had to work in the dark,” he remembers. “There was no work on this, despite the importance of the problem.” His economics professors were so skeptical about his thesis that they required a sociologist to serve on his Ph.D. committee, but the sociologist wasn’t at all interested in what Becker was doing.
Of course, Becker’s work was all about economics; economists just didn’t know it yet. His notion of combining economics and sociology wasn’t a small step in the tradition of economic thinking—it was a whole new direction. His work showed what happens to markets and economic interactions when people discriminate. For instance, what happens in the labor market if a company prefers to hire one person rather than another (say, it hires women for certain kind of jobs, but not for others)? If you can develop good answers to this question, you can probably understand an important factor in what drives an economy. Yet economists didn’t seem to have such answers in the context of discrimination.
Despite the skeptics, Becker had enough support from Friedman and others that he didn’t completely lose his faith, and after receiving his Ph.D. he landed a job teaching at Columbia University. In 1957, at the age of twenty-seven, he published a book based on his thesis, called The Economics of Discrimination, in which he described what he called “taste for discrimination”—prejudice that springs from hatred or “animus” toward others. This kind of discrimination shows up when one person avoids or acts against another “just because” they don’t like that person’s race, religion, or sexual preference.
The incentives that Becker studied were n
ot just money. Hating someone could be a strong motivation to discriminate against him. According to Becker’s theory, people who bear this kind of animus don’t just hate the “other,” but they would also willingly surrender money—profits, wages, or income—to cater to their prejudice. For example, a white man who harbors animus toward blacks would rather work for $8 per hour alongside a fellow white man than for $10 per hour alongside a black man. In this case, the “animus incentive” overcomes the monetary one.
Still, when he first traveled around the world presenting his work on The Economics of Discrimination, a common objection from other economists was that “this is not economics.” Basically, their argument against Becker went like this: “It’s not that this work isn’t interesting or important; it’s just that you should leave it to psychologists and sociologists.” But things began to change with the advent of the civil rights movement of the 1960s. Soon, people were fiercely interested in the topic of discrimination and economics, and Becker’s was the only serious book out there.
“Suddenly, influential people began reading it, and the whole thing snowballed,” he recalls. The book was reprinted in a second updated edition in 1971 and is considered a classic because it forever changed the way we understand discrimination. By the time the Nobel Committee gave Becker the Nobel Prize in Economics in 1992, its members specifically praised The Economics of Discrimination. “Gary Becker’s analysis has often been controversial and hence, at the outset, met with skepticism and even distrust,” the Nobel Committee noted in its press release announcing the prize. “Despite this, he was not discouraged, but persevered in developing his research, gradually gaining increasing acceptance among economists for his ideas and methods.”4