Should students get paid for good grades?

It can work, but paying for the grade itself is the weakest version. In a randomized study of about 38,000 US students, cash for test scores did nothing measurable, while cash for things a kid controls day to day, like reading books or showing up and turning in homework, raised reading scores. If you pay, pay mostly for the habits and keep the report card bonus small.

How much should I pay my kid for an A?

There is no standard rate. The best-known study paid ninth graders $50 per A, $35 per B and $20 per C, which is far more than most families spend. A common family version is $1 to $5 per A depending on age, with a cap per report card so the total stays inside your budget. Pick an amount small enough that you can keep paying it every term without resentment.

Does paying for grades kill motivation?

The fear is that kids stop caring once the money stops. The cash-for-grades study by economist Roland Fryer measured intrinsic motivation with a standard survey and found no evidence that the payments lowered it. A year after the reading program ended, about half of the reading gain was still there, though that leftover was too small to be statistically certain. That is one large study, not the final word, so watch your own kid and adjust.

At what age should you start paying for grades?

Letter grades usually start around third or fourth grade, so ages 8 to 9 is the earliest it makes sense. Before that, and even at 8 to 10, paying for inputs such as books finished or a homework streak works better, because a young kid cannot easily connect effort to a grade weeks later. Switch to a small per-grade bonus around 11 to 14, when they can plan for a report card.

Should I take money away for bad grades?

Most families who pay for grades do not fine for low ones, and a fine tends to turn the report card into a fight. The Chicago program in the study paid nothing for a D or an F and held back the term money until a failed class was made up, then paid it all. That keeps the stakes clear without taking away money a kid already has.

Is paying for grades the same as paying for chores?

No. Chores are work for the household, and school is work for the kid. Many parents keep a regular allowance separate from both, then add a small, predictable bonus for school effort. Keeping the three apart means a bad term does not wipe out the money your kid uses to practice spending and saving.

By the Penny Time editorial team October 30, 2026

Reviewed by the Penny Time editorial team

Part of our Allowance hub.

Should Kids Get Paid for Good Grades? What a $6.3 Million Study Found, Plus a Pay Scale by Age

Paying kids for good grades works best when you pay for the habits behind the grade, not the grade itself. A Harvard economist paid about 38,000 students a total of $6.3 million, and the clearest win came from paying 2nd graders $2 for each book they read. Paying for test scores did nothing measurable.

TL;DR: Pay for inputs your kid controls this week (books finished, homework turned in, days on time). Keep any report-card bonus small, $1 to $5 per A depending on age, with a cap. Do not fine for low grades. Keep it separate from allowance.

What the study paid, and what happened

In the 2007-08 and 2008-09 school years, Roland Fryer ran randomized trials in 261 schools in four cities. Each city paid for something different, which is what makes the results useful to a parent deciding what to reward.

City and grade	What kids were paid for	Pay rate	Average earned	Result
Dallas, 2nd grade	Reading a book and passing a short quiz on it	$2 per book, up to 20 books a semester	$13.81 (max $80)	Reading comprehension rose by 0.18 to 0.25 standard deviations
Washington, DC, middle school	Five daily habits, including attendance and behavior	$2 per point, up to 50 points every two weeks	$532.85 a year (max $1,322)	Reading scores rose
Chicago, 9th grade	Grades in five core classes, every five weeks	$50 per A, $35 per B, $20 per C, $0 per D	$695.61 a year (max $1,875)	Better attendance and almost one more class passed, no test-score gain
New York City, 4th grade	Scores on 10 school tests	$5 for taking a test, up to $25 for a perfect score	$139.43 a year (max $244)	No measurable effect
New York City, 7th grade	Scores on 10 school tests	$10 for taking a test, up to $50 for a perfect score	$231.55 a year (max $495)	No measurable effect

Source: Fryer, "Financial Incentives and Student Achievement: Evidence from Randomized Trials," NBER Working Paper 15898 (2010). Amounts are what the programs paid in 2007-09.

When kids were paid for something they knew how to do (read a book, get to class, sit through a lesson), achievement went up. When they were paid for a score, it did not. Fryer's leading explanation is that kids did not know how to turn wanting the money into a better score, so "get an A" left them with nothing specific to do.

A pay scale you can use at home

The study's rates were set for a research program with outside funding. Most families need numbers they can pay every term without thinking twice. The scale below is our suggested starting point, built on the study's main finding, not a survey of what parents pay. Adjust it to your budget.

Age	Pay for (main)	Example rate	Report card bonus	Cap per term
8 to 10	Books finished, a week of homework done without reminders	$0.50 to $1 per book or per week	None, or $1 per A	$10
11 to 12	Homework turned in, a study plan kept before a test	$1 per week kept	$2 per A, $1 per B	$20
13 to 14	A grade raised in one class they picked, missing work made up	$5 when the target grade is hit	$5 per A, $3 per B	$35

Suggested example scale, not a standard. Educational content only, not financial advice.

A quick check on cost: a 12-year-old with six classes who brings home four A's and two B's earns $10 under this scale, inside the $20 cap. Under the Chicago study's rates, the same report card would have paid $270.

Ages 8 to 10: pay for the habit, skip the grade

At this age a grade shows up weeks after the effort, and many kids cannot connect the two. The Dallas result is the one to copy: a small amount for something your kid can finish today. A book read, a spelling list practiced, a week of homework done before dinner. Pay right away, in the same week, so the link is obvious.

Keep it small. The average Dallas second grader earned under $14 over the whole program, and reading scores still went up.

Ages 11 to 12: add a small report card bonus

Middle school brings more teachers, more homework and real letter grades. Keep paying for the weekly habit, and add a modest per-grade bonus so the report card means something. Put the cap in writing before the term starts. That one step heads off the argument when a great report card meets a fixed budget.

This is also a good age to decide where the money goes. If your kid already gets an allowance, a grade bonus is extra on top, not a replacement. Our middle school allowance guide has amounts for this age if you are setting both at once.

Ages 13 to 14: pay for a target they choose

Young teens can plan, so let them set the goal. Pick one class where they want to move up, agree on what the target grade is, and attach one payment to hitting it. The Chicago program shows why this works better than paying for every A: the grade money got ninth graders to show up and pass more classes, but it did not move their test scores. A specific target with a plan behind it gives your teen something to actually do.

If your teen already earns money from jobs or babysitting, a grade bonus can feel small next to it. Keep it anyway: at 13 or 14 the lesson is in making the plan and hitting the target.

Where the money goes once it is earned

A bonus your kid can watch build is more motivating than cash that disappears into a pocket. With Penny Time, your child opens the app on their own phone or tablet and sees the grade bonus land in their balance, with your note ("4 A's this term") in their history next to their regular allowance. You add the money from your phone in a few taps. Want to set the regular allowance first? The allowance calculator gives you a weekly amount by age in a minute.

Rules that keep paying for grades from backfiring

Pay on time, every time. The study's programs paid on a regular cycle: Chicago after each five-week grading period, DC at the end of each two-week pay period. A promised bonus that arrives late teaches kids the deal is not real.
No fines for low grades. Pay nothing for a D or F instead. The Chicago program held money back until a failed class was made up, then paid it all.
Keep it apart from allowance. A bad term should not wipe out the money your kid uses to practice spending and saving. The same logic applies to chores, covered in should allowance be tied to chores.
Write the deal down. One short note: what earns money, how much, the cap, and when it pays.
Same rules for siblings, scaled by age. A 9-year-old and a 14-year-old should not be on the same scale, but they should be able to see the rules are fair.

If you are weighing per-task pay against a flat amount in general, commissions vs allowance covers the trade-offs.

Sources

Roland G. Fryer, Jr., "Financial Incentives and Student Achievement: Evidence from Randomized Trials", NBER Working Paper 15898, April 2010. Pay rates, average earnings, school counts and results in this post come from this paper.

Frequently Asked Questions

: It can work, but paying for the grade itself is the weakest version. In a randomized study of about 38,000 US students, cash for test scores did nothing measurable, while cash for things a kid controls day to day, like reading books or showing up and turning in homework, raised reading scores. If you pay, pay mostly for the habits and keep the report card bonus small.
: There is no standard rate. The best-known study paid ninth graders $50 per A, $35 per B and $20 per C, which is far more than most families spend. A common family version is $1 to $5 per A depending on age, with a cap per report card so the total stays inside your budget. Pick an amount small enough that you can keep paying it every term without resentment.
: The fear is that kids stop caring once the money stops. The cash-for-grades study by economist Roland Fryer measured intrinsic motivation with a standard survey and found no evidence that the payments lowered it. A year after the reading program ended, about half of the reading gain was still there, though that leftover was too small to be statistically certain. That is one large study, not the final word, so watch your own kid and adjust.
: Letter grades usually start around third or fourth grade, so ages 8 to 9 is the earliest it makes sense. Before that, and even at 8 to 10, paying for inputs such as books finished or a homework streak works better, because a young kid cannot easily connect effort to a grade weeks later. Switch to a small per-grade bonus around 11 to 14, when they can plan for a report card.
: Most families who pay for grades do not fine for low ones, and a fine tends to turn the report card into a fight. The Chicago program in the study paid nothing for a D or an F and held back the term money until a failed class was made up, then paid it all. That keeps the stakes clear without taking away money a kid already has.
: No. Chores are work for the household, and school is work for the kid. Many parents keep a regular allowance separate from both, then add a small, predictable bonus for school effort. Keeping the three apart means a bad term does not wipe out the money your kid uses to practice spending and saving.

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