The value of earning for learning: Performance bonuses in immigrant language training

We study the effects of performance bonuses in immigrant language training for adults. A Swedish policy pilot conducted in 2009-2010 gave a small randomly assigned group of municipalities the right to grant substantial cash bonuses to recently arrived migrants. A conservative interpretation of our results, building on a difference-in-differences approach, suggests that the bonus did not improve student achievement on average. However, we find substantial positive effects where institutional features and participant characteristics made it ex ante more likely for the bonus to have an impact.