Forty consecutive weeks with a $50 weekly allowance: The transformative impact of unconditional financial assistance on adolescents' lives
In a groundbreaking study conducted by the Rooted School Foundation and researchers from the University of Tennessee and the University of Pennsylvania, high school students in New Orleans received $50 every week for 40 weeks, with no strings attached. The study, now expanded to eight other high schools in New Orleans and Rooted's sister campus in Indianapolis, aimed to understand the impact of this financial support on a teen's financial capability, self-perception, and academic performance.
The key findings of the study, released this week, reveal a positive impact on financial capability and behavior, school attendance, and self-efficacy.
Financially, the extra cash helped students acquire stronger long-term planning skills and familiarity with savings accounts and other financial products. Receiving cash increased their financial literacy and awareness without any formal financial education attached, suggesting that access to financial resources alone promotes smarter money management and a cognitive shift in how students engage with financial products.
Students used the $50 for essential needs like food, transportation, college applications, and driver’s education. By the end of the study, students who received the cash payments, on average, had saved $300 - a 15 percent savings rate, triple the national average for American adults. Students who received the $50 reported feeling greater agency and control over their finances.
In terms of school attendance, students receiving the cash transfers attended approximately 1.23 more days of school per semester compared to controls, indicating a positive effect on school engagement and attendance.
The cash transfers also helped build students' confidence and belief in their ability to manage money and achieve goals, alleviating financial stress and allowing them to focus more on school and personal development.
However, despite these improvements in attendance and financial skills, the study found no statistically significant improvement in students’ grade-point averages or reading performance during the intervention period.
Talia Livneh, senior director of programs for the Rooted School Foundation, stated that the politics may need to catch up to the research. Aditi Vasan, a pediatrician and researcher, mentioned skepticism about a federal program that gives unconditional financial support to people. Skeptics often worry about recipients using public dollars for drug use or other illicit behavior, despite the data not supporting that.
In conclusion, the unconditional $50 weekly cash transfers support low-income high school students by reducing financial stress, improving school attendance, and enhancing financial skills and self-confidence. While the study did not demonstrate direct academic achievement gains in GPA or reading in the studied time frame, it offers a promising direction for future research and policies aimed at supporting disadvantaged youth.
[1] Researchers wanted to understand the impact of the money on a teen's financial capability and perception of themselves, as well as its potential effect on grade-point averages and reading scores. [2] The study found that financially, the extra cash helped students acquire stronger long-term planning skills and familiarity with savings accounts and other financial products. [3] Students who received the cash transfers attended approximately 1.23 more days of school per semester compared to controls, indicating a positive effect on school engagement and attendance. [4] The cash transfers helped build students' confidence and belief in their ability to manage money and achieve goals, alleviating financial stress and allowing them to focus more on school and personal development.
- The study corroborated that the unconditional cash transfers helped students enhance their financial literacy and self-perception, with no visible improvement in grade-point averages or reading scores during the intervention period.
- The findings from the study suggest that direct access to financial resources like the $50 weekly cash transfers promotes smarter money management and a shift in students' cognitive engagement with financial products.
- In the study, students who received the cash transfers showed a positive impact on school attendance, with around 1.23 more days of school attended per semester compared to the control group, hinting towards improved school engagement and commitment.
