The Hindu Business Line : Will money motivate your child?

Consider this. You have a school-going child at home. Her room is always messy and her cupboard, bordering around chaos. What would you do to ensure discipline? If you are like my friend who believes in incentives, you would offer your child some spending cash to tidy her room. But do such incentives work?

Now, economics is about incentives. But it does not state that such incentives are only monetary in nature. Sometimes, it pays to offer non-monetary incentives. Why?

Offering money for a household task makes it a job. The monetary incentive turns a parent-child relationship into an employer-employee relationship. And children do not quite cherish such associations.

Your child may do a summer job at a restaurant and earn some spending cash. She can tell her friends how fiercely independent she is. Earning money from a household chore does not quite fit into her scheme of things.

A monetary incentive may, hence, backfire. What if she chooses not to work on a certain day? You may not pay, but the room would still remain unclean.

It would be better to initiate a moral incentive to make your child tidy her room. You may, for instance, impress on her that her contribution to household work is important for the family. By paying her money, you substitute moral incentives with economic incentives.

Behavioural economists conducted an experiment in a daycare centre to see how people react to such incentive changes. Parents occasionally came late to pick their children. So the centre, as a disciplinary measure, levied fine on the latecomers. What do you think happened?

More parents started arriving late. Why? The levy changed the incentive structure. Earlier, arriving late was morally wrong. But parents could now wash away their guilt of coming late by paying a fine.

Incentive changes, hence, may not always work. Money may or may not buy love. But it certainly cannot make your child tidy her room. My friend is still coming to terms with it.

The author is the founder of Navera Consulting.

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