Roland Fryer on the Colbert Report

Roland Fryer, economist at Harvard, talks with Stephen Colbert about cash incentives for good grades in schools.

It's a hilarious interview - unlike a lot of people who come on this show, he is absolutely ready for Stephen's antics. He's too cool for school (Harvard, anyway). I'm starting to believe the observation that Harvard never tenures its assistant professors, thereby preserving its competitive advantage in stodginess and ossification. (Not really - I'm just mad they rejected me twice.)

More seriously, the question of incentives for good grades touches upon the idea of incentives in general in areas where the primary social structure is based on norms and not free-market capitalism (at least on the face of it). It's an interesting idea, and I hope it works. I'll be writing more about this later - in particular, when you attempt to create a bonus incentive scheme, there is a presupposition that the principal-agent relation is limited by motivation on the part of the agent. Is this an issue of motivation, or of capacity? To what extent can the added motivator effectively change capacity over any reasonable time period? What are the lessons to be learned from areas in the service sector where financial incentives are applied in situations where actors may be governed by social-welfare utility functions? And finally, what are the potential implications for the parent-child relationship - if external actors are seen as providers of material well-being, will this further erode the family, or simply offer a superior alternative and success model for children in families with failed parents?