Should students get paid for attending school? Do incentives matter

See Detroit schools aim to reduce absenteeism, support teachers in $1.1 billion budget by Edith Pendell of Michigan Public Radio on June 17. Excerpt:

"The new budget broadens the district's existing attendance incentive program, which has provided $100 per week in Visa gift cards to high school students with perfect attendance. Middle schoolers will receive $50 a week for perfect attendance in the coming school year."

Also see Detroit students have a chance to earn up to $1,000 for attending school again this year by Hannah Dellinger of CHALKBEAT. Excerpts:

"Nearly half of all high schoolers in the Detroit district were paid for their attendance last year as part of an effort to reduce high rates of chronic absenteeism."

"Average daily attendance for high schoolers increased by 2.6 percentage points last year, Superintendent Nikolai Vitti said, while chronic absenteeism declined by 7.4 percentage points." 

"More than 7,300 students got a $200 Visa gift card at least once last year from the district for showing up to each class every school day in a 10-day cycle from January to March in 2025. Some students received the incentive more than once."

"Studies on attendance incentives suggest the practice may have small effects, if any" 

"This year, $100 gift cards will be given for perfect attendance in five-day cycles."

"The incentive began last week and will continue through the week of March 16, giving students the opportunity to earn up to $1,000."

Related posts: 

How to Make Up the Covid Learning Loss: Paying students for attendance, behavior and homework can boost achievement (2022)

Should We Pay Students To Study? (2008) 

The Ethics of Incentives (2012)

Why are Chinese parents buying empty milk cartons? (another case of incentives matter) (2024)

How Metrics Or Formulas That Supposedly Measure Quality Of Services Can Create Incentives To Engage In Misleading Behavior (2018) (sick patients tend to worsen the performance measures by which VA hospitals are judged and they get turned away)

 

Do artists today respond to financial incentives? The answer, my friend, is blowin’ in the tax code (2020)

 

Can you choose when to have your baby born if it brings you some money (2024)

The Economy Affects The Birth Rate (2010)

Did The Recession Help Lower The Birth Rate? (2011)

U.S. Fertility Rate Hits Lowest Level on Record (2012) 

A number of women who put off having babies after the 2007-09 recession are forgoing them altogether; more educated women and student debt also contribute to decline in birth rates (2018

Births in U.S. Drop to Levels Not Seen Since 1979 (2021)

Dim economy drives women to donate eggs for profit (2009) 

"An advertisement in campus newspapers at three elite colleges offers $35,000 for the eggs of a young woman with an SAT score above 1400."

"College newspapers and Craigslist carry advertisements seeking women and men, particularly students with high GPAs and SATs, who are willing to "donate" their gametes."

"Egg donors in the United States are typically paid $5,000 to $10,000, a voluntary ceiling established by the American Society for Reproductive Medicine. Sperm donors get about $100 per donation;..."

Companies and governments are paying people to get healthy, and it works (2019)

How Parents Might Get Their Kids To Eat Vegetables (2017) (See Here’s Why You Should Pay Your Children to Eat Their Vegetables: Study finds short-term cash incentives yield more-healthful eating habits in the long term by Beckie Strum of the WSJ)

How to Motivate Your Teen to Be a Safer Driver (2021) (paying teen drivers not to use phones while driving lowers phone use)

Paying Americans to go to the gym may not be enough to help them build a habit of regular exercise (2017)

Ohio sees surge in vaccinations after offering $5 million lottery (2021)

Incentives Matter, Even When It Comes To Returning Bottles (2011)

In Maine, which has a more expansive bottle-redemption law than neighboring states, three people have been accused of illegally cashing in more than 100,000 out-of-state bottles and cans for deposits

Should the Government Pay People to Have Sex? (2007) 

Financial Rewards for College Students Could Help Curb the Pandemic (2021)

Should People Be Rewarded For Voting? (2006)

There was a huge collapse in wealth inequality in the UK between 1900 and 1980

Tweet from Sylvain Catherine. He is a professor at Wharton, the business school of the University of Pennsylvania. Excerpts:

"If . . .we look at the top 1% . . . there was a huge collapse in wealth inequality in the UK between 1900 and 1980, and basically no change since then. And that is before taking state pensions into account. The same thing is true when you look at the top 10%."

The graph shows the share or percent of total wealth going to the top 1% and the top 10% over time. Those shares fell dramatically.  

 

The age of the solopreneur

More solo founders, growing faster, powered by AI

By Ernie Tedeschi, Marisa Rama, and Chris Cruickshank. Excerpts:

"This post advances three related arguments. First, solopreneurship is growing faster than employer-business formation, and the acceleration is validated by multiple independent data sources, making it unlikely to be driven by a fraud wave. Second, both the number and share of solopreneurs reaching meaningful income thresholds is rising. And third, early signals indicate that AI is filling the capability gaps that once made hiring necessary—and doing so fast enough to show up in the income distribution. 

New business applications in the Census Bureau’s Business Formation Statistics have been flashing an unusual signal for the past 18 months. New business applications are filings with state agencies and the Internal Revenue Service that precede actual commercial activity. These new applications reaccelerated beginning in late 2024, after spiking in 2020 at the beginning of the pandemic and remaining elevated thereafter.

This acceleration, however, is not being driven by applications from businesses that have a “high propensity” or likelihood to become employers."

"Businesses that signed up on Stripe after 2023 reached material transaction volumes earlier than the sign-up cohorts that preceded them. The share of businesses (not just solopreneurs) reaching $1 million in cumulative revenue within a year after going live on Stripe was roughly 30% higher for the 2025 cohort as it was for the 2023 cohort, and it was roughly 3x higher for the 2025 cohort than the 2019 cohort. If more recent sign-up cohorts were increasingly driven by inactive businesses, we would expect more time to material volume thresholds, not less."

"the story of spiking business applications is not confined to the United States. New business registrations have risen roughly 40% in Australia, 70% in Finland, and 80% in France since 2017, with meaningful acceleration in 2025 alone. Multicountry acceleration across different regulatory environments argues for a more fundamental driver than fraud activity. And in France, where more granular data is available, the surge in business formation is driven primarily by solo founders or microentrepreneurs rather than by traditional employer businesses—similar to the US."

"In 2023, roughly four million Americans earned their primary income as solopreneurs, generating over $100,000 in annual revenue. That figure has risen substantially from the mid two-million range of the early 2010s"

There is "a consistent upward trajectory in both the count and share of solopreneurs earning above various income thresholds."

"We find that there has been a substantial increase in the number of solopreneurs earning over $100,000 in our index, but an even larger increase in the number earning at higher income thresholds, with a clear acceleration since 2023. More than twice as many solopreneurs earned over $1 million in 2025 than in 2023, and close to three times as many crossed $5 million and $10 million.

Perhaps even more interestingly, the share of solopreneurs earning above these income thresholds has also doubled in the last two years, suggesting that—rather than the surge in business applications reflecting low-quality experimentation with a few lucky standouts— the cohorts of new solopreneur businesses might actually be of higher quality than in the past."

"It seems likely that AI is one of the primary drivers of both the acceleration in solo business formation"

"An agent can now help you find the best tools for your business and handle your integration with minimal support."

"The recent growth in nonemployer businesses shows a positive relationship with industry-level AI adoption, suggesting that higher AI adoption has been broadly consistent with more growth in nonemployer applications"

"Part of the reason businesses historically tended to be built by groups was that a single individual rarely possesses all the skills needed in the entrepreneurial journey. Whether it’s how to evaluate or size a market, code an app, price a product, write and execute a marketing campaign, or close a deal, AI (and AI-augmented software) can fill many of the gaps that founders previously turned to another human for."

Conclusion

While the recent surge in US business formation is not reflected in high-propensity applications, the evidence points toward a structural increase in genuine small business activity over 2025 and 2026, driven by solopreneurs. Preliminary evidence of growth in AI tool usage and solopreneur growth in high-AI-adoption sectors suggests that advances in AI are responsible for a meaningful portion of this growth. We believe AI is lowering barriers to business formation and growth by expanding the capabilities of solopreneurs, further improving tools and platforms that cater to new businesses, and creating a new set of opportunities for entrepreneurs to pursue. Whether the magnitude of this effect is as large as the most optimistic readings of the data suggest remains to be seen, but we believe we might be in the early innings of a fundamental acceleration in business formation—which could have ripple effects throughout the economy."

The Seasonally Adjusted CPI Was Up 0.074% in July

Here are the changes in the seasonally adjusted CPI for the six months ending in June: 

Jan. 0.1708%

Feb. 0.2670

March 0.8651%

April 0.6400%

May 0.4729%

June -0.4220%

 

The last decline before June this year was June 2024 when it was -0.042%.

 

See Consumer Price Index for All Urban Consumers: All Items in U.S. City Average from FRED (Federal Reserve Economic Data) compiled by the Research Division at the Federal Reserve Bank of St. Louis for data on the seasonally adjusted CPI.  

That site shows a graph but if you click on the Download button you will get the actual numbers in Microsoft Excel.

The Consumer Price Index for All Urban Consumers: All Items in U.S. City Average (CPIAUCSL) was 332.813 in July and 332.568 in June. Since 332.813/332.568 = 1.00074, that means it was up 0.074%. If we had that every month for 12 months the CPI would be up just 0.888%.  

It was 322.169 in July 2025. Since 332.813/322.169 = 1.033, that means it was up 3.3% over the last 12 months.

 

The non-seasonally adjusted CPI was 333.918 in July and 323.048 in July 2025. That was up 3.37%. So pretty close to the seasonally adjusted CPI. This is well above the Fed's target of 2.0% (although they prefer to use the Personal Consumption Expenditures Price Index which was 3.7% higher in June 2026 than June 2025).

 

For more information see Consumer prices rose 0.1% in July, as expected, putting the annual rate at 3.4% by Jeff Cox of CNBC. Excerpt: 

"A key inflation reading Wednesday showed prices moderating across a range of goods and services, possibly taking the urgency out of an imminent interest rate hike.

The consumer price index, part of the Federal Reserve’s inflation dashboard, showed a seasonally adjusted increase of 0.1% during July, according to the Bureau of Labor Statistics. Excluding food and energy, the so-called core CPI rose 0.2%.

On an annual basis, the inflation rates were 3.4% and 2.5%, both down 0.1 percentage point from June.

All of the readings were line with the Dow Jones consensus forecasts.

Though the levels held well above the Fed’s 2% target, the tame monthly readings, coupled with similarly moderate levels in June, indicate that the energy-fueled burst earlier in the year is easing, though prices remain volatile and subject to constantly changing conditions in the Middle East."

The article also discusses what types of products are going up in price and what is going down. There is a graph of the monthly year-over-year percent change in prices and core prices going back almost 4 years. 

Related material: 

Consumer Price Index for All Urban Consumers: All Items Less Food and Energy in U.S. City Average (CPILFESL) This is also from from FRED (Federal Reserve Economic Data), compiled by the Research Division at the Federal Reserve Bank of St. Louis. It has the seasonally adjusted core CPI.

 

Consumer Price Index Data from 1913 to 2025

 

Personal Consumption Expenditures Price Index 

 

The Bureau of Labor Statistics makes seasonal adjustments. See Consumer Price Index Summary.

 

The table below has the annual inflation rate since 1914 in the columns labeled CPI %Ch. or CPI percentage change. It is from Consumer Price Index Data from 1913 to 2026 and is not seasonally adjusted. It is also the December to December change in the CPI. That site also looks at how the 12 month average for the CPI changed from one year to the next.  

 

Year	CPI %Ch.		Year	CPI %Ch.		Year	CPI %Ch.		Year	CPI %Ch.
1914	1		1944	2.3		1974	12.3		2004	3.3
1915	2		1945	2.2		1975	6.9		2005	3.4
1916	12.6		1946	18.1		1976	4.9		2006	2.5
1917	18.1		1947	8.8		1977	6.7		2007	4.1
1918	20.4		1948	3		1978	9		2008	0.1
1919	14.5		1949	-2.1		1979	13.3		2009	2.7
1920	2.6		1950	5.9		1980	12.5		2010	1.5
1921	-10.8		1951	6		1981	8.9		2011	3
1922	-2.3		1952	0.8		1982	3.8		2012	1.7
1923	2.4		1953	0.7		1983	3.8		2013	1.5
1924	0		1954	-0.7		1984	3.9		2014	0.8
1925	3.5		1955	0.4		1985	3.8		2015	0.7
1926	-1.1		1956	3		1986	1.1		2016	2.1
1927	-2.3		1957	2.9		1987	4.4		2017	2.1
1928	-1.2		1958	1.8		1988	4.4		2018	1.9
1929	0.6		1959	1.7		1989	4.6		2019	2.3
1930	-6.4		1960	1.4		1990	6.1		2020	1.4
1931	-9.3		1961	0.7		1991	3.1		2021	7
1932	-10.3		1962	1.3		1992	2.9		2022	6.5
1933	0.8		1963	1.6		1993	2.7		2023	3.4
1934	1.5		1964	1		1994	2.7		2024	2.9
1935	3		1965	1.9		1995	2.5		2025	2.7
1936	1.4		1966	3.5		1996	3.3
1937	2.9		1967	3		1997	1.7
1938	-2.8		1968	4.7		1998	1.6
1939	0		1969	6.2		1999	2.7
1940	0.7		1970	5.6		2000	3.4
1941	9.9		1971	3.3		2001	1.6
1942	9		1972	3.4		2002	2.4
1943	3		1973	8.7		2003	1.9

 

Here is a timeline graph of this data: