Schools offering unconditional $50 weekly payments to high school students - their experiences and consequences.
In a groundbreaking study facilitated by The Rooted School Foundation, low- and middle-income high school seniors in New Orleans and Indianapolis received $50 a week for 40 weeks with no strings attached[1]. The results of this study, conducted over one semester, suggest that this intervention could have significant positive impacts on educational outcomes and economic mobility[1].
Jonathan Johnson, the founder and CEO of Rooted, spearheaded the study[1]. The findings revealed that students who received the stipend attended an average of 1.23 more days of school per semester[1]. Furthermore, the study found that students who received the payments demonstrated greater economic stability, enhanced academic engagement, increased sense of personal agency, and more confidence in making long-term financial decisions[1].
The students' spending patterns were consistent with how adults are spending money in similar programs across the country and the world. Approximately 45.8% of the funds were spent on essentials like food, while around 12% were spent on transportation[1]. Interestingly, students saved an average of $300 by the end of the program[1].
The study's findings suggest that giving money to students may have a positive impact on academic engagement. However, it's worth noting that the study did not show a statistically significant improvement in GPA[1]. A longer study period, such as one year or multiple years, might be needed to see significant changes in academic outcomes.
The city of New Orleans recognized the broader social benefits of this intervention, such as reduced likelihood of engaging in crime due to increased economic stability[1]. As a result, the city invested $1 million to extend the study to more schools and track outcomes for 18 months post-graduation[1].
This research highlights the potential of unconditional cash stipends as a practical intervention for improving youth economic mobility, reducing crime risks, and promoting long-term educational and life success among economically vulnerable high school students. The implications of the study should matter to everyone who cares about student success and building the workforce for the future.
[1] Source: The Rooted School Foundation (2021). Unconditional Cash Transfers for High School Students: Evidence from a Randomized Controlled Trial. Accessed on March 15, 2023. https://www.rootedschool.org/research/unconditional-cash-transfers-for-high-school-students-evidence-from-a-randomized-controlled-trial/
- The study conducted by The Rooted School Foundation, led by Jonathan Johnson, demonstrates that students who received unconditional cash stipends displayed greater economic stability and improved personal agency in matters related to personal finance.
- The findings suggest that the intervention, extended by the city of New Orleans with a $1 million investment, may contribute to reduced crime risks and promote long-term educational and life success among economically vulnerable high school students.
- This research indicates that the government could potentially use similar financial aid programs to foster education and self-development, not only by providing students with the means to attend school more consistently, but also by encouraging responsible personal-finance decision-making.
