Paying for Performance II: The cost effectiveness of strategies to combat anemia in ChinaREAP Project
Gaping rural-urban inequality is a major challenge facing the rapidly developing Chinese society today. Educational inequality is perhaps among the most severe, where alarming disparities in school performance exist between rural children and their urban counterparts. Recent research has shown that poor health and nutrition, among other issues, are a significant contributing factor to this achievement gap.
Reducing iron deficiency anemia (the most common type of anemia among children in rural China) is in principle easily accomplishable with simple, inexpensive nutritional interventions. However, few corrective steps have actually been taken. The misalignment between suppliers’ incentives and the socially desirable outcome of health may be one reason. In light of this, in 2010, we conducted a pay-for-performance pilot project. We found that schools that received financial incentives to reduce anemia showed higher increases in hemoglobin compared to control schools.
Our research also found that incentives based on anemia reduction are more effective when complemented with incentives based on test scores. If principals believe there is a connection between anemia and school performance, incentives based on test scores alone may raise hemoglobin levels and academic achievement.
Recent research from the MIT Poverty Action Lab has suggested that the size of the incentive has little effect on the outcome. If this is true, incentive schemes that reward performance could be considerably cheaper and more financially sustainable.
In this study, we hope to further our previous work and explore these possibilities by testing more cost-effective forms of performance pay.
Our objective in this study is to assess the potential of performance pay, specifically health and test score based incentives to school principals, as a useful element of policy efforts aimed at reducing anemia in rural China. In particular, we hope to assess:
- whether health and test score based incentives are complementary or not in improving health and educational outcomes
- whether health and test score based incentives can individually improve both health and educational outcomes
- the effectiveness of small incentives relative to larger incentives
Sampling and Randomization
We randomly selected 300 primary schools in China’s Northwest (specifically, Qinghai, Shaanxi, and Gansu) known to have relatively high anemia rates. We surveyed 50 4th and 5th graders for the baseline survey at each school. We then randomly assigned study schools to one of the five experimental arms, described in detail below.
1. Information + Subsidy (65 schools)
All principals of the sample schools received information about anemia and a subsidy earmarked for anemia reduction. They were given a menu of options that may help reduce anemia and/or raise student test scores. This group serves as the control group.
2. Information + Subsidy + Anemia Reduction Incentive (65 schools)
Principals in these schools received a monetary incentive to reduce anemia rates on top of the information and subsidy.
3. Information + Subsidy + Test Score Incentive (65 schools)
Principals in these schools received a monetary incentive to raise student test scores on top of the information and subsidy.
4. Information + Subsidy + Dual Incentive (65 schools)
Principals in these schools received a monetary incentive to reduce anemia rates AND a monetary incentive to raise student test scores on top of the information and subsidy.
5. Information + Subsidy + Small Anemia Reduction Incentive (40 schools)
Principals in these schools received a small monetary incentive to reduce anemia rates on top of the information and subsidy.
- Baseline survey (September 2011):
At home- we surveyed parents on basic household characteristics.
At the schools- we surveyed students, teachers, principals, and district superintendents on general and health-related questions.
Specifically, we collected data on student hemoglobin levels and performance on standardized curriculum-based tests of math and Chinese language. These will serve as our main outcome variables. Some of our secondary variables will include nutritional knowledge and principal/teacher time use.
- Endline survey (June 2012):
We will use the same forms and tests as in the baseline survey. We will then compare the change in hemoglobin levels and test scores, as well as other secondary variables, between the control group and the intervention groups. In doing so, we aim to assess the individual and combined effects of anemia reduction and test score based incentives on health and educational outcomes, as well as test whether small incentives are as effective as larger ones.
This project is classified as ongoing.