Unconditional Cash Transfers for High School Students: Early Findings from New Orleans & Indianapolis

Background

While most existing GI programs target socioeconomically vulnerable adult populations, the Youth Cash Transfer (YCT) is one of the few providing cash payments to youths. YCT is unique also for its program setting: it is set in two charter schools and implemented through a collaboration between schools, community financial institutions, and research partners, providing a unique opportunity to study the impact of GI among youths in school settings. Literature on youth wellbeing indicates that young people’s own access to financial resources is predictive of their health and wellbeing, and academic outcome. This is because youth’s access to financial resources offers opportunities for consumptions and activities that are perceived as meaningful, relevant, and enjoyable, which can translate to greater wellbeing through more autonomous and intrinsically motivated choices and behaviors. Accordingly, the theory of YCT program posits that a weekly cash transfer to youth will lead to changes in youths’ financial lives as well as their social and academic lives. Specifically, we posit the program will have an immediate impact on four areas: financial stability and freedom, financial capabilities, financial socialization, and future orientation. While the program is not designed to improve academic and wellbeing outcomes, we suspect that the program may have a long-term impact on students’ academic and wellbeing outcomes through shaping students’ financial stability and freedom, and future orientation.

Methods

The goal of this study is to understand program participants’ experience in the YCT program and to examine programmatic impacts on youths’ financial, social, and psychological outcomes. The quantitative part of the study employs two cluster random clinical trials using individual-level random assignments to test the impact of the YCT program at school sites. For each school site, we randomly assigned students to a treatment group where participants received $50 cash weekly for 40 weeks, and a control group received no treatment. During the 10-month time frame, we assess and compare study participants on four areas: financial stability and freedom, financial capability, financial socialization, and future orientation. The qualitative part of the study includes eight focus group interviews with study participants, and ten in-depth interviews with teachers and staff to gain insights on youths’ financial socialization and program impact within the school community.

Results

Preliminary spending data showed study participants in the first three months spent most money on food and groceries (49%), followed by retail and services (30%) and transportation (13%), and least on health care/medical care (3%), travel and entertainment (3%), and housing and utility (2%). Quantitative findings regarding program impact on youth’ financial stability and capability will be shared, and qualitative findings regarding program impact on interpersonal (financial socialization) and community level (school) will be discussed.

Implications

The YCT program provides a unique opportunity to examine the impact of GI among youths in school settings. The study aims to provide valuable insights into the program's impact on youths’ financial, social, and psychological outcomes, and to inform the scaling of similar programs in the future.