Winter 2018

Paying Bonuses to Improve Nutrition

Can a strategy from the business world help solve public health problems?

By Julie Flaherty

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Illustration: Chris Gash

In India, at least 30 percent of children are seriously undernourished. With a health crisis that enormous, getting help to the children most in need can be difficult. Professor William Masters, a food economist at the Friedman School, recently found that a low-cost business technique could spur people close to the problem to find their own solutions.

India’s public day-care system, the world’s largest, provides more than 30 million children with a midday meal. In a recent study, published in the Journal of Health Economics, Masters and a colleague tested whether giving cash bonuses to day care workers would improve the growth of the children they care for.

To begin, the researchers measured each child and gave workers a goal card for their day-care center, showing which children were clinically underweight. Then the study assigned workers to one of two incentive plans. One group of workers received a traditional lump-sum bonus of 200 rupees (about $3), to recognize their work and thank them in advance for additional efforts to improve the children’s growth. The other was promised a 200-rupee bonus for every child who moved up the growth scale after three months. Both payments were on top of the workers’ regular pay of 4,000 rupees per month (about $67).

And that was it. Unlike a pre-planned intervention that delivers a particular supplement or type of advice, “there was no finger-wagging, ‘do this, do that’” in the study, Masters said. There was only offering the bonuses to the workers, “and then watching to see what they do.”

Both incentives worked better than a control group, which did not receive a bonus. The average number of malnourished children in each center declined by one in the lump-sum group and by two in the group that was paid per child.

Just as interesting to the researchers as those results was how the incentivized day-care workers went about improving outcomes. They didn’t feed the children more, but spent more time talking to the children’s mothers about nutrition. “It’s entirely possible they recognize what the mothers do at home is more important to the child’s growth,” Masters said.

Although the pay-for-performance plan helped more children, it was more expensive and harder to administer. It also led workers to invest more time with the children in this study who were closest to crossing a nutrition threshold. A similar thing happened in the United States when No Child Left Behind gave teachers incentives to improve achievement. “Test scores improved for kids at the margin,” Masters said, “without helping kids who were too far below the threshold.”

But the most important takeaway is that bonuses for front-line workers made a big difference, Masters said, and could potentially be used to help deliver other public health services. Incentives could encourage Head Start teachers in the United States, for example, to help prevent obesity in their young students. “People respond to incentives,” he said, “and in so doing, they discover their own ability to make a change.”

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