Evidence Based Education
Classroom Economy
As a teacher, I have been using a classroom economy system for the past 5 years. In this system, each student has a classroom job, a set of responsibilities, a monthly pay, and a monthly rent to pay. Key to this system is that one of the jobs is banker. At the beginning of each year, I assign 4 responsible students the job of banker. Their job is to record when students earn or lose money. The currency itself is not physical, it only exists on the balance sheet of the bankers, just like real life! This is essential for making the economy run smoothly, because it means that you as the teacher do not have to constantly worry about handing out tokens or recording student finances. On top of classroom jobs, I typically use this currency to reward or fine students. I especially use this currency as a reward for good academic behavior. When students check off a learning goal or hand in an assignment, I give them a reward of 200 dollars of classroom economy currency. I also heavily reward students if they help a peer. If a student helps a friend check off a math learning goal, they get 500 dollars of classroom economy currency.
In my personal experience, this has been a game changer for me as a teacher. Within a month of using the classroom economy for the first time, I was convinced for life that this works. My classroom management became infinitely easier. I stopped having to send students to the office, I stopped having to give out anywhere near as many detentions, work completion massively increased, and in my opinion student academic performance also massively increased. Classroom economy became my main tool for behavior management. That said, while I am a big fan of this tool, I also have only used it for grades 6-8 and prior to writing this article, I had never seen any research on this topic.
However, recently, Kim et al, published a meta-analysis of studies on Token Economy Practices in K-5 Educational Settings, in 2022. Their meta-analysis looked at 25 single-case design studies. The fact that the meta-analysis did not look at any experimental design studies does weaken the magnitude of the findings in my opinion however, the results were impressive.
As can be seen in the above results, the rate of improvement showed massive growth, after implementing a classroom economy. However, most of these studies looked at behavior outcomes, not academic outcomes. Only two of the studies looked at academic outcomes, Alter, 2012 and Shepley et al., 2016. They showed effect sizes of .85 and .82 respectively, which does suggest that classroom economy can also be useful for improving academic performance. Unfortunately the authors did not calculate effect sizes for moderator variables, so it does make it hard to identify how best this strategy can be used with this research.
I decided to look to see if I could find any higher quality research of the topic and found a large-scale RCT by Batty, et al, in 2020. Their study looked at the impact of giving students classroom economy, in grades 3-5 over a 3 year period. Students in the control group received lectures on financial literacy. Students in the treatment group received lectures on financial literacy and classroom economy. The study included a sample size of 1078 students. A mean effect size of .07 was found for financial literacy, and -.13 for math outcomes. An overall mean effect size of -.01 was calculated. The math assessment was a standardized assessment and the financial literacy assessment was a 13 question questionnaire designed by the researchers. This study only looked at math and financial literacy. However, the results for both were statistically insignificant. While the Batty et al study is only one study, its design is far more rigorous than the studies looked at in the Kim meta-analysis and its results should not be quickly dismissed. However, the study also did not look at impacts on behavior and should not be used to make judgments about the validity of classroom economy as a behavior management tool.
Overall it appears that there is moderate academic evidence for the efficacy of classroom economy as a behavior management tool. As we have a large number of low rigor studies showing that it is very effective. We have three studies on its efficacy for improving academic outcomes. Two single case studies showed strong improvements. One large scale, longitudinal RCT showed negative, albeit statistically insignificant outcomes. It appears there is a need for more research in this area.
There are some potential downsides to the classroom economy, as it could be argued that it is an extrinsic reward system, which research has shown can be detrimental for older students. In 2014, Marina S. Lemosa and Lurdes Veríssimob conducted a large study in 200 elementary schools which showed that, while “IM (intrinsic motivation) was steadily associated [with] better achievement, a negative relationship emerged between EM (extrinsic motivation) and students’ achievement by the end of elementary school.” (Lemosa and Lurdes, 935). The paper also showed that starting in grade four, extrinsic motivation became less and less effective to the point of which it actually lowered academic results by later elementary grades. (Lemosa and Lurdes, 936).
Another research paper by Matt DeLong and Dale Winter showed that the use of extrinsic rewards can lower the effectiveness of intrinsic motivation. For example, during one set of experiments the psychologist Edward Deci had one group paid to solve puzzles and a control group not paid to solve the puzzles. “ He found that the group that was paid to solve puzzles stopped solving puzzles as soon as the experiment—and the payment—ended. However, the group that wasn’t paid kept solving the puzzles even after the experiment was over.” (Learning to Teaching and Teaching to Learn Mathematics, 168).
In my personal experience, I have found classroom economy to have an intrinsic element. Because I typically don’t allow students to buy things with their token currency more than once a month, students have to save for a long time. Moreover, sometimes students will save their currency for multiple months to build up their capital. One year after Halloween had just passed, and I had a surplus of on sale candy, I experimented with rewarding my grade 6-7 students with candy instead of classroom economy currency. I found it much less effective. I asked the students how they felt about it and they told me they preferred the classroom economy currency over the candy as a motivator. Indeed one student, much to my surprise, even articulated that “Getting the candy was so immediate that I began to feel that it was not worth doing anything, unless I was paid in candy.” The students in this example behaved the same as participants in the Delong study. My hypothesis would be that because classroom economy requires a delay in gratification, that it ends up being both an intrinsic motivator and an extrinsic motivator.
Written by Nathaniel Hansford
Last Edited 2023-01-07
References:
Batty, M., Collins, J. M., O’Rourke, C., & Odders-White, E. (2020). Experiential financial education: A field study of my classroom economy in elementary schools. Economics of Education Review, 78(Complete). https://doi.org/10.1016/j.econedurev.2020.102014
Kim JY, Fienup DM, Oh AE, Wang Y. Systematic Review and Meta-Analysis of Token Economy Practices in K-5 Educational Settings, 2000 to 2019. Behav Modif. 2022 Nov;46(6):1460-1487. doi: 10.1177/01454455211058077. Epub 2021 Nov 16. PMID: 34784784.
Marina, L and Lurdes, V. (2013). The Relationships between Intrinsic Motivation, Extrinsic Motivation, and Achievement, Along Elementary School. Procedia - Social and Behavioral Sciences.12(7), 930-938.
Harris, D. (2000). The Impact of Complex Trauma on Motivation in Children. San Francisco State University. Retrieved from https://psychology.sfsu.edu/sites/default/files/Poster.pdf.
Matt DeLong and Dale Winter, Learning to Teaching and Teaching to Learn Mathematics: Resources for Professional Development, Mathematical Association of America, 2002, page 168.