By Marie Fazio
Every Wednesday morning for nearly a year, Dejah Grimes woke up to a $50 deposit in her account, money she was free to spend however she chose.
Most weeks she gave the card to her mom, who put it towards the water or electric bill. Occasionally she used it to go to the movies or the mall with her friends, or to pay for school expenses, including the recent purchase of a black polo shirt with the G. W. Carver school logo embroidered on the breast, a privilege reserved for seniors.
“It helped my family a lot,” Grimes said. “It really made life easier.”
Now, hundreds of other New Orleans teens are set to receive similar assistance as part of a groundbreaking study on the impact of providing young people with a “universal basic income,” or recurring cash payments with no strings attached.
After promising preliminary findings and a $1 million investment from the city of New Orleans, a guaranteed income program that began with 20 students at The Rooted School in 2020 will expand this fall to 1,600 high school seniors at schools across the city over the next three years. Deemed the “$50 Study,” the program gives students $50 per week and follows their academic and financial progress. It’s one of the first of its kind to study the impact of universal basic income on youth.
Researchers said that high schoolers over the past two years — 386 students from The Rooted School in New Orleans, The Rooted School Indianapolis and G. W. Carver High School — who received payments missed fewer days of school, showed more literacy growth and enjoyed more financial stability than their peers who did not receive money.
“It shows there is some sort of antidote to addressing some of the more entrenched issues that we continue to navigate in New Orleans,” said Jonathan Johnson, founder and CEO of Rooted School Foundation.
‘Promising’ preliminary findings
At the height of the pandemic in 2020, Johnson, then executive director of Rooted New Orleans, noticed an alarming spike in absenteeism among his students, many of whom had to take on extra shifts at work to help their families make ends meet.
Hoping to alleviate some of the financial stress on students, they launched a “micropilot” with 20 Rooted seniors, ten of whom received weekly payments. From 2022 to 2024, they expanded to a randomized control trial with 386 students over two cohorts.
According to preliminary data, which has not yet been peer reviewed, students who were given the funds attended an average of two more school days per semester and their reading test scores grew by nearly double that of the control group. Researchers also found students who received the money demonstrated better “financial capability,” a term used to refer to financial literacy and real-world application, and scored higher on tests measuring their financial well-being.
Stacia West, who co-founded the Center for Guaranteed Income Research at University of Pennsylvania and acts as lead researcher for the $50 study, said the program can provide young people with valuable lessons, including how to navigate — or avoid — risky financial instruments such as payday loans and credit cards.
“The fact that these kids are able to interact with these financial markets so early,” said West, who is also an associate professor at the University of Tennessee, “means they’re going to be better equipped when they get into their 20s to make better financial decisions.”
Students in phase one of the study, which took place from 2022 to 2023, only used about half of cash assistance. About 47% of the money remains in the students’ bank accounts, suggesting many are saving.
Of the money they did spend, about 50% went towards food and groceries, 30% to goods and services, 12% to transportation, 3% to healthcare and the rest to other expenses.
Results from the second phase of the study, which followed 28 students from Rooted Indianapolis, 47 students from Rooted New Orleans and 155 students from G. W. Carver — a Collegiate Academy-run high school — will be published in the spring.
Grimes, who participated in the second phase, said having the money helped her family with unexpected expenses, like food and travel purchases while out-of-town for her great-grandmother’s funeral. This summer, she used it to pay for Ubers back and forth to work as a camp counselor-in-training at Live Oak Camp.
“When I was stressed I was like, ‘I don’t really have to stress now,'” she said. “‘I can really do my best in school and get my good grades like I always do.’”
She also said she learned how to handle money, what to save for and what to spend.
Malik Williams, a junior at G. W. Carver, said he spent money on food and school supplies, including a pair of New Balance sneakers and a pair of headphones.
Big Picture
New Orleans used to have a guaranteed basic income program aimed at young people ages 18-24 that was part of a national initiative called Mayors for Guaranteed Income. An effort to expand the program in December was not funded by the city council.
Jeff Schwartz, Director of Economic Development at the City of New Orleans, said in a statement that the agency is “thrilled to be an investor” in the $50 study.
“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,” Schwartz said. “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.”
West said that the Rooted School’s study is the first to track the impact of guaranteed income on young people. The larger sample size for the expanded study – about half of New Orleans seniors will participate and about a quarter will receive funds – will allow them to collect better data about the academic impact of the money, such as GPA and attendance, she said.
“The sort of financial education that kids get in school is how to budget and maybe a little bit of how to balance your checkbook, but they’re never really given the opportunity to practice it,” West said. “I think this could be a new way to think about educating and socializing our children financially.”
