It鈥檚 hard to learn how to manage money if you don鈥檛 have any.
Today鈥檚 high school students graduate into a world of increasingly complicated financial choices and competing spending priorities. That鈥檚 why researchers have teamed up with charter schools in New Orleans and Indianapolis to pilot a simple but radical idea: They gave students from predominantly low-income families $50 a week with no strings attached鈥攅xcept one: Stay enrolled in school.
Their goal was to see how the experiment would change students鈥� perceptions of money, how they would spend it, and if it would affect their relationship with school.
The first results of the study, released July 22, show some promise: The 200 students in a test group, who had $50 automatically loaded onto a debit card weekly for 40 weeks, had improved attendance compared to those in a control group. At least initially, they also grew in understanding of financial concepts.
These findings come as schools increasingly emphasize financial literacy, some in response to recently passed state mandates, and as 糖心动漫vlog struggle to respond to the countless social and logistical factors that affect student attendance and engagement. Participants, in fact, addressed some of those factors, like unreliable transportation to school or an inability to pay for extracurricular activities, with their cash transfers.
鈥淲hat鈥檚 fascinating about it is there was no financial literacy component and no financial education intervention,鈥� said Stacia West, an associate professor of social work at the University of Tennessee and the co-founder and director of the Center for Guaranteed Income Research at the University of Pennsylvania who helped conduct the research. 鈥淲hen kids are given financial access and means, it causes a cognitive change where you start paying more attention to financial products around you.鈥�
Study builds on anti-poverty policies used with adults
The unique study draws on concepts that sociologists have long studied among adults: How poverty circumscribes people鈥檚 ability to 鈥済et ahead.鈥�
鈥淎 lack of resources introduce mental and cognitive scarcity,鈥� West said. 鈥淲hen you鈥檙e in poverty, your brain is obsessed with 鈥楬ow am I going to make ends meet?鈥� It leaves you unable to make forward economic momentum because you鈥檙e hyper focused on survival.鈥�
Researchers have tested the merits of universal basic income for adults providing them regular, unconditional cash transfers to provide a financial safety net.The schools鈥� two-year randomized study is the first to test the idea with only teen participants.
The newly released results involved two one-year cohorts of students who attended the three schools鈥擱ooted School charters in Indianapolis and New Orleans, and George Washington Carver High School in New Orleans鈥攊n the 2022-23 and 2023-24 school years. Students who volunteered were randomly assigned to control and experimental groups with similar demographics, and the resulting analysis controlled for household income levels.
About half of the 400 students, the experimental group, received $50 a week. Their peers in the control group received a $10 Amazon gift card every month.
Researchers tracked the students鈥� transactions, accumulated savings, and academic records, and responses to surveys about self-perception. They also periodically administered a developed by the Consumer Financial Protection Bureau, which includes teens questions about financial decisionmaking and familiarity with concepts like compound interest and adjustable-rate mortgages.
Students had the freedom to spend, save, and learn from mistakes
Josie Jones, who graduated from New Harmony High School in New Orleans in May, hadn鈥檛 even heard of the experiment when her classmates urged her to check her email to see that she qualified after her school joined a new cohort in the experiment last year. She was surprised to find out she鈥檇 been selected for the experimental group.
Because she lived on her own her senior year, Jones said the weekly deposits helped supplement the biweekly paychecks she earned working at a coffee shop鈥攑aying for a tank of gas or a bag of groceries when money was tight.
鈥淚t can help you learn how to budget a steady inflow of money,鈥� Jones said. 鈥淚f I didn鈥檛 have money for food or for gas, it was kind of like a backup. I learned how to keep money where it needed to be, rather than just spending it on Starbucks.鈥�
Results from the initial cohorts were mixed.
Students in the treatment group missed 1.23 fewer days of school on average in the following fall semester than their peers in the control group. There was no statistically significant impact on students鈥� grades.
鈥淭hey鈥檙e not worrying about basic necessities鈥攁nd it shows,鈥� said an unnamed school leader quoted in the report. 鈥淭hey鈥檙e showing up more鈥攁nd they鈥檙e happier.鈥�
Students in the experimental group showed strong growth in the 鈥渕oney knowledge and choices鈥� section of the survey between the fall and spring semesters, researchers found. But on the final administration of the survey, the scores of the control group and experimental group were not statistically significant.
Transaction data showed students spent about 45% of the money on food and groceries, 35% on retail sales and services, and 12% on transportation.
Students also demonstrated self-control. Among those who maintained money in their accounts, the average balance was $300, about 15% of the total money given to them over the course of the school year.
Students鈥� spending patterns closely mirrored those of adults in previous studies, including a 2019 experiment in Stockton, Calif., in which a group of 125 randomly selected residents received $500 a month for two years with no conditions, said West, the University of Tennessee professor.
Scaling up the experiment
The student experiment aims to test an idea rather than to prescribe a universal policy solution, she said.
As interest in financial literacy grows, some 糖心动漫vlog may be tempted to tie payments to participation in money-management lessons or other interventions. But researchers involved in the $50 experiment want to test the effects of money alone before they layer on other factors, West said.
While students from more affluent families may receive an allowance or occasional spending money from their parents, students from lower-income households don鈥檛 typically have the flexibility to learn how it feels to impulsively spend money on something frivolous or to save over time for a larger purchase.
Those experiences can motivate students to learn about money or to think more critically about how they will use it in the future, West said.
Students discussed their experiences in the , where they shared stories of using the money to pay for college application fees, saving up to buy a prom dress, and shifting how they think about spending.
While the results of the initial study were mixed, researchers hope to learn more by following larger cohorts of students for a longer term, West said. New Harmony, where Jones attended school, is one of 12 New Orleans charter schools that joined the experiment in the 2024-25 school year. Researchers plan to follow the 1,600 students in that cohort for about four years after graduation to track outcomes like college enrollment.
Researchers also plan to pilot the experiment with 40 students in the District of Columbia.
Money for the experiment came from a a grant from the city of New Orleans and coalition of unnamed donors, said Talia Livneh, the senior director of programs at the Rooted School Foundation, which helped organize the project.
