New Orleans program that gives teens $50 a week will be expanded

New Orleans program expands, and results show giving teens $50 a week is having a positive effect.

The program provides young individuals with a universal basic income (UBI). Teens in the realm receive $50 a week in stipends, with no specific spending requirements. Starting with 20 students at The Rooted School in 2020, the $50 Study will host 1,600 highschool seniors.

According to the study extension comes from positive results from the initial rollout. It also received a $1 million investment from New Orleans to proceed distributing to more teens. Researchers found that recurring payments led to fewer school absences, increased literacy, and financial stability for recipients.

Students within the program, which tested 386 participants in two groups, also demonstrated “financial literacy.” The results showed that they demonstrated financial literacy in real-life situations. Students in the primary group spent only half of their weekly allowance, and about 47 percent remained unused.

Of the cash spent, about 50% went to food and 30% to goods and services. The finding suggests that students often made smart financial decisions once they had access and opportunity.

“The fact that these kids can interact with these financial markets so early,” said Stacia West, considered one of the study’s lead researchers. “(That) means they’ll be better prepared in their 20s to make better financial decisions.”

For some students, the cash was a relief from the stress of taking good care of themselves when their family funds didn’t allow it.

“When I was stressed, I was like, ‘I really don’t need to be stressed right now,’” explained winner Dejah Grimes. “I can really do my best in school and get good grades like I always do.”

While this program shouldn’t be the one UBI study in existence, it’s uniquely focused on encouraging UBI adoption across a wider range of age groups.

“This unique study of guaranteed income for public high school students will produce results that will inform policy and programming as we all work toward a more equitable and inclusive city,” explained Jeff Schwartz, Director of Economic Development for the City of New Orleans. “This study meets students where they are and provides opportunities for economic mobility that are certain to have lasting impacts for individuals and the broader community.”

With larger class sizes, the study will gather more data to prove that implementing UBI on a larger scale can improve communities across the country, starting with New Orleans.