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Financial Rewards for College Students Could Help Curb the Pandemic

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With a dangerous winter ahead, containing the pandemic is crucial. One innovation worth trying in the months before vaccinations are widespread is to pay college students to be careful and remain free of the coronavirus.

Many colleges and universities already require undergraduates who live or take classes on campus to get regular Covid-19 tests. They might also offer students cash rewards for testing negative.

Doing so could reduce the spread of the virus to the entire community. And the expenditures could save the colleges money over the long run by helping them avoid the far larger costs of major outbreaks.

Moreover, a recent economics study offers new insight into how to design effective financial rewards programs that could work especially well for college students.

First, regular tests are a prerequisite, because before you can reward someone for being Covid-negative, you need to know she is Covid-negative. Unlike financial incentives to encourage people to get vaccinated, therefore, a rewards program could not be rolled out nationwide.

But it could work well at many colleges. Northwestern University, where I work, requires weekly testing for students who are on campus, for example, and the University of California, Berkeley, and the Massachusetts Institute of Technology require twice-weekly tests. More colleges and universities are likely to roll out regular testing after the holiday break.

Second, students already know the importance of social distancing, and many are already playing it safe to protect their health and that of their loved ones. But a student who avoids parties this weekend because of plans to see her mother next week might take fewer precautions if such a visit isn’t likely.

Financial incentives might help people behave consistently as though their mothers’ lives depended on it.

There are several ways such programs might work:

  • A university might announce that each week that students test negative, they will be paid $50. Once they tested positive, they would no longer be eligible for rewards.

  • The rewards could be structured as a one-time payment of $700 at the end of a 14-week semester if students test negative every week.

  • In a blend of these two options, students could receive $350 if they stayed negative for the first half of the term, then another $350 for staying negative for the second half.

Higher or lower sums might be preferred. The important thing is to find incentives that motivate as many students as possible in order to protect the broader population.

Rewards programs that pay people to be diligent about their health are already common. Many companies offer employees money if they exercise regularly, and addiction clinics pay people who stay drug-free.

The recent study, which appeared as a working paper, provides insights on how such programs might best be applied to the coronavirus.

In their study, the economists Shilpa Aggarwal of the Indian School of Business, Rebecca Dizon-Ross of the University of Chicago and Ariel Zucker at Berkeley experimented with an incentive program in India that encouraged diabetic adults to walk at least 10,000 steps a day. They found that several methods were successful in boosting exercise and improving health.

The economists found that an all-or-nothing contract — for example, paying students only if they stayed Covid-negative the whole term — worked especially well for people who hate to sacrifice short-term pleasure. Those are exactly the type of people who might be reckless in their social life and whose risky behavior a college would want to curtail.

The study measured how much each person was willing to sacrifice in the future to avoid a sacrifice today. Some people put a steep discount on whatever happened in the future, whether good or bad. These so-called impatient people want to have fun today and to push off unpleasant activities until later.

The researchers assigned the adults in India to one of two incentive contracts. Under the first, participants earned a reward each day they hit 10,000 steps. Under the second, they earned a reward only if they walked 10,000 steps at least five times in a week.

The researchers found that the second contract — what they call a “time-bundled” incentive — increased exercise more for people who were especially impatient.

It turned out that while it was hard for such people to sacrifice immediate pleasure, it was also true that forgoing pleasure in the future didn’t seem all that bad to them.

The clever feature of “time-bundled” contracts is that they persuade people to do something they dread by tying it to something that seems great. For a college student it might be very appealing to get a lot of money in exchange for a series of low-key Fridays in the future. The attractiveness of the overall bundle can persuade an impatient person to forgo short-term temptations, like going to a party tonight.

But meeting a stay-negative-all-term goal is so daunting that some students won’t even try. Indeed, the researchers who studied walking in India saw this pattern in their data.

For that reason, a middle ground might work best for the coronavirus. I’d emphasize the option in which students receive two lump sums, one for each period they remain negative.

In addition to colleges, some companies have regular testing programs. They could start offering financial rewards to their employees who tested negative as a way to slow the spread of Covid in their workplace.

It’s possible, of course, that incentives that reward altruistic behavior could backfire, if they caused people to lose their motivation to act altruistically. That’s why rewards programs need to be carefully constructed. Under current circumstances, it seems worth taking the risk to try them.

Public health experts have warned that terrible suffering is likely over the next few months. Rewarding college students for safe behavior is one way to reduce the suffering until the pandemic is over.

Seema Jayachandran is an economics professor at Northwestern University. Follow her on Twitter: @seema_econ

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