One of the basic tools for teaching economics in the lower grades is a token economy. Students are "paid" with classroom currency (often designed by the students) for completion of tasks, jobs in the classroom, even grades. The money is then available for them to use in various ways - free time, library visits. Some teachers even make it a necessary part for participation in enhancement programs. One teacher told me that if his students wanted to take part in a stock market simulation he ran each year, the students had to buy in by saving a certain number of classroom dollars.
Token economies are sometimes also used as a classroom management tool. Here's an interesting post on one such experiment. (HT to Arnold Kling at EconLog.) I encourage you to read the comments, as well. And share your thoughts with the rest of us.
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I've never been a fan of "reward systems" for students. Now, I currently have the luxury of working in a school where most students are already internally motivated so they are not necessary, thought I've also worked in schools where that wasn't the case. I've just always had the gut feeling that educators should be teaching students that the joy of learning and the possibilities it opens up should be their motivation.
I read Tyler Cowen's new book "Discover Your Inner Economist" over Christmas break and I thought that it had some interesting insights in this area. He talks about how there are certain tasks where extrinsic motivation is necessary or helpful, like menial tasks, and others where it is actually counterproductive. His example that stuck with me is that paying your kids to do housework is actually counterproductive because they will put forth the minimal necessary effort and will stop as soon as the payment stops, whereas if you can get them to feel like the task is an important part of the family life and that they have responsibility for it, then they will put forth a greater effort and will becom intrinsically morivated. I thought that this applies well to our challenge as teachers - we should be finding ways to help students become intrinsically motivated to learn. I will grant that in some situations it may be necessary to begin with extrinsic motivation with the goal of transitioning to intrinsic somewhere down the road.
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