in Haifa, Israel, in the late 1990s a daycare center found itself in a predicament. When it came time for parents to collect their kids from the center, a quarter of them arrived late, after closing time, resulting in forlorn children and a supervisor who was forced to work overtime. On the advice of a couple of economists, the center decided to institute a fine of $3 each time a parent showed up late.

It seemed like a sound plan, because now the parents had not one but two reasons, both a moral and a financial one, to arrive on time.

The penalty policy was announced, and the number of parents who arrived late... went up. Before long, a third of them were arriving after closing time, and, within weeks, fully 40%. The reason, it was quickly discovered, was that parents saw the fine as a fee and therefore no longer felt any moral obligation to pick up their kids

Read the paper about the daycare center here. on time.

Link to the daycare study