Abstract
The paper investigates if the provision of financial incentives has an impact on the performance of students in educational tests. The analysis is based on data from an experiment with high school students who answered multiple-choice items from the Third International Mathematics and Science Study (TIMSS). As in TIMSS, the setup did not discourage students from guessing. Students with a salary based on individual performance did not score significantly better than students with a fixed payout or a payout based on the performance of the entire group. However, incentives have an impact. The group with individualized payments showed significantly more guessing activities than the others.
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