Early Results of Rooted School Foundation's "The $50 Study" Include Promising Findings

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Aug 12, 2024, 10:12 ET

The $50 Study is a first of its kind study to measure the impact of direct, unconditional, cash transfers on teens. Results and findings from cohort I of a multi-year Randomized Controlled Trial show that students who receive direct cash transfers experience improved school attendance, reading level and financial capability.

NEW ORLEANS, Aug. 12, 2024 /PRNewswire/ -- Rooted School Foundation is excited to share preliminary findings and results from "The $50 Study", an innovative guaranteed income program aimed at high school students in New Orleans and Indianapolis. Since its inception in 2020, The $50 Study has reached over 400 students, making it one of the largest studies of its kind globally. From 2022-2024, Rooted School Foundation (RSF) facilitated a Randomized Controlled Trial (RCT) in which two cohorts of students received $50/week for 40 weeks. The results from the first cohort offer a promising outlook on the ways guaranteed income can impact high school students.

Students at the Rooted School in Indianapolis show off the debit cards (with card numbers covered) that hold the $50 a week guaranteed income the school and researchers are giving them to teach financial literacy. (Patrick O’Donnell)

Cohort I Key Findings

The first cohort included 156 students from Rooted School New Orleans and Rooted School Indianapolis; 82 students were in the treatment group receiving $50/week for 40 weeks during the 2022-2023 school year. The remaining students were in the control group and did not receive the cash transfers. Preliminary results from of the study, compiled by the Center for Guaranteed Income Research and the University of Tennessee-Knoxville, are directionally promising as they suggest that direct cash transfers impact students' lives in the following ways:

Students in the treatment group missed two fewer days of school (over a semester) compared to those in the control group. As students are required to be present a specific number of days for both grade promotion and graduation, the impact of decreased absenteeism can have a significant impact on students' educational outcomes.
Lexile (reading) score levels grew more for students in the treatment group (0.5 years growth) compared to those in the control group (0.25 years growth) over the same time period. Reading level is a key indicator of educational success, both in high school and after graduation.
Students in the treatment group improved their knowledge and habits related to managing money. While financial literacy was not explicitly taught to students in the treatment group, the findings from survey responses suggest that students' who receive the cash transfers deepen their financial capability.
Transaction data shows that students predominantly used the money for basic needs such as food and transportation. Approximately 47% of money transferred to students in cohort I was still in bank accounts at the end of the study, suggesting that students are also intentionally saving their money.

"When young people have access to money – and the stress relief inherent within that access – transformative outcomes are possible. These outcomes transcend credit attainment, Lexile growth, and excellent attendance numbers... This transcendence means actively walking the path to financial freedom every day." - Kaitlin Karpinski, Rooted School New Orleans Executive Director and School Leader

Impact on The Field
While many guaranteed income pilots and studies explore and highlight the positive impacts of guaranteed income for adults, minimal research has been done to understand the implications of direct cash transfers on youth, specifically through the lens of academic outcomes. This study starts to fill that gap, showing that small cash transfers can improve school performance, increase financial capability, and improve well-being. RSF is in the final months of cohort II of the RCT (230 students total; 91 in treatment), and will have results from both cohorts available in 2025.

"We know that the odds for upward economic mobility are increasingly stacked against young people, particularly those from lower income backgrounds and marginalized identities. This study, the first ever conducted with high schoolers, shows that when young people are trusted and supported with unconditional cash, they invest in their futures – improving their reading ability, class attendance, and capacity to manage money. Expanding The $50 Study will not only lead to improved outcomes for more students, but will also further the research base for the impact of these programs" – Dr. Stacia West, Co-Founder, Center for Guaranteed Income Research, University of Pennsylvania; Associate Professor, University of Tennessee

The $50 Study Expansion Plans
Building on the success of the RCT, RSF is preparing to launch "The $50 Study: Long Term Impacts of Unconditional Cash for High School Students" in partnership with The City of New Orleans' Office of Economic Development. This RCT study will include 1,600 New Orleans public high school seniors; 800 students will receive $50/week for 40 weeks. Students will continue to be enrolled in the study for an additional 46 months after the transfers end to further understand the impact of the cash transfers on long-term outcomes, such as college enrollment and persistence.

RSF has invited all open enrollment charter high schools in Orleans Parish to participate in the expanded $50 Study. The following schools have opted-in to participate: Rooted School New Orleans, New Harmony High School, Sophie B. Wright High School, InspireNOLA Schools: Edna Karr High School, McDonough 35 College Preparatory High School and Eleanor McMain Secondary School, Collegiate Academies Schools: Abramson Sci Academy, G.W. Carver High School and Livingston Collegiate Academy, and EQA Schools: The NET: Central City, The NET: East, and The NET: Gentilly. RSF will keep the invitation to participation open until September 1, 2024.

"The Office of Economic Development is thrilled to be an investor in 'The $50 Study,'" said Jeff Schwartz, Director of Economic Development at the City of New Orleans. "This unique guaranteed income study enrolling public high school students will produce results that will inform policy and programming as we all work toward a more equitable and inclusive city. This study meets students where they are and provides opportunities for economic mobility that will surely create lasting impacts for individuals and in the larger community." – Jeffery E. Schwartz, Director of Economic Development, City of New Orleans

"With The $50 Study, we're charting new territory in youth economic empowerment and education. Our initial observations are intriguing, showing potential in areas like school engagement and financial capability. However, we're cautious about drawing broad conclusions at this early stage. What's clear is that this approach warrants further exploration. As we expand the study, we hope to gain deeper insights that could inform future educational strategies and economic policies for young people." – Jonathan Johnson, Founder and CEO of Rooted School Foundation, who is also an Advisor with the Guaranteed Income & Health Consortium at Johns Hopkins Bloomberg School of Public Health

Support for The $50 Study
Individuals and organizations interested in investment or involvement in The $50 Study can connect with the team by emailing [email protected], listening to participant stories on The Rooted Cash Podcast, or donating to the program here.

SOURCE Rooted School Foundation