Education is an investment for children. This is much more apparent in higher education as college students pay top dollar to get a degree that will hopefully provide them with a higher salary in the future. This reasoning still holds true for younger kids. Even through elementary school and high school, students offer up their time as opportunity cost for education.
We know that as a society, we all profit from the external benefit that comes from education. But we also know that we value future benefits less than we value current benefits. So how can we encourage society to educate themselves when the personal benefit doesn’t always outweigh the costs? Sure we could try common political tactics like lowering the cost of school. But just for fun, why don’t we explore the option of bribing kids to do their homework?
You probably all know the kid in class who would get $50 for every A on their report card. Or maybe the kid who got to go out to ice cream for every passing test grade. You may have even been that kid. I know I sure wasn’t. This parenting tactic always pissed me off as a kid because I was reliable for my own future without any immediate reward. But in the grander scheme of things, maybe those parents were on to something.
The economic thought behind this bribery is that the future discount rate will be offset by the more current reward, making the task relevant enough to put in that hard work. This makes sense when you think back to when you were in the junior high with only a vague picture of what your future may look like. It becomes difficult to commit to learning new things and pushing yourself to get better grades when there is no realistic goal in sight.
When children enter into the real world, however, there won’t be anyone to hand them a crisp $20 for doing the laundry or emailing their boss. In the real world, these benefits come directly in paychecks for doing your job or promotions for going the extra mile. In the adult world, benefits from your work are more immediately received. If someone told me that I may or may not get a large sum of money after years of work, there is no way I would take the job. The same goes for children hoping that 15+ years of education pays off in the end.
So my question to you is this: Do you think you would have worked harder and made it further if you were bribed as a child? And would you bribe your own children?