Education and Labor Market Effects of College-Prep Incentive Programs

Paying eleventh- and twelfth-grade students and teachers for passing AP scores ... makes employment more likely, and is associated with higher earnings.

The Advanced Placement Incentive Program (APIP) is one of a number of initiatives designed to encourage U.S. high school students in inner-city schools to take more difficult AP courses. APIP provides cash incentives for passing grades on AP tests in selected Texas school districts: the APIP students receive between $100 and $500 for each AP score of 3 or above, and teachers receive $100 to $500 for each 3 or above earned by students enrolled in their courses. Teachers who participate receive additional training from the College Board and also may be eligible for bonuses of $2,000 to $10,000. Private donors defray about 70 percent of APIP costs.

In Do College-Prep Programs Improve Long-Term Outcomes (NBER Working Paper No. 17859), C. Kirabo Jackson finds that the APIP strategy of paying eleventh- and twelfth-grade students and teachers for passing AP scores increases participation in the AP program, raises college attendance, improves college persistence, makes employment more likely, and is associated with higher earnings. His research compares outcomes for students at high schools that participate in the APIP program with outcomes for students at otherwise comparable schools that are not participating. A school's participation in the APIP program raised the fraction of students taking an AP course from 22 percent to 30 percent. The fraction of students taking an AP exam went from about 5.5 percent to 6.8 percent. The fraction of students who passed an AP exam went from 4.7 percent to 5.4 percent.

After he corrects for individual test scores before entering the APIP program, and for student ethnicity, gender, English proficiency, and eligibility for a free lunch, Jackson finds that a school's participation in the APIP program increased college attendance by an average of 4.2 percentage points (7 percent), the probability of ever enrolling as a college sophomore by about 6.6 percentage points (20 percent), and the probability of ever enrolling as a college junior by 2 percentage points (11 percent). Students from APIP-participating schools were not more likely to earn a college degree, but they were 2.2 percentage points (4 percent) more likely to be employed, and they enjoyed a 3.7 percent earnings advantage, in 2010. The study tracked high school students for the period between 1993 and 2005. Hispanic students had larger improvements in educational attainment and earnings than other participants in the program.

--Linda Gorman