OpenAI CEO Sam Altman has long been a proponent of basic income, presumably because it helps justify his vision of a future in which artificial intelligence eliminates millions of jobs and tosses much of the working-age population out of the labor force. Now, new research funded by Altman finds that basic income probably can’t really do what the tech mogul hoped.
For years, Altman has financially supported an organization called OpenResearch which, on Monday, delivered its first research results related to a multi-year effort to study the impacts of basic income on a small sample of people. Between November 2020 and October 2023 (notably pandemic years), the program gave a thousand people living in some of the nation’s poorest households (annual income around $30k a year) $1,000 a month and then studied the impact. A control group of 2,000 people in similar economic circumstances was given $50 a month.
The researchers concluded that while regular payments can help recipients pay for basic stuff like housing, transportation, and groceries, they don’t necessarily lead to greater upward mobility, and, from the looks of this study, they certainly could never act as a replacement for a job (as some in Silicon Valley have implied).
According to the researchers, basic income payments had virtually no impact on the person’s “quality of employment” (i.e., their ability to get a better job) and were not meaningful enough to lead to significant “investments in human capital” (education/training that could be translated into a better job). It’s not that the money wasn’t helpful, it just wasn’t helpful enough to assist in these key areas (at least when it came to this sample of the population over this specific span of time). The research, which was published by the National Bureau of Economic Research, states:
…we find no impact on quality of employment, and our confidence intervals can rule out even small improvements. We observe no significant effects on investments in human capital, though younger participants may pursue more formal education. Overall, our results suggest a moderate labor supply effect that does not appear offset by other productive activities.
Outside of these findings, the study shows that the regular payments had a number of mixed economic impacts on program participants. For instance, the report shows that a number of participants expressed “increased interest in entrepreneurship” as a result of the payments, though this interest did not ultimately “translate into a significant increase in entrepreneurial activity for the average recipient” by the time the study ended. The report notes that while many participants “had dreams of starting their own businesses, the cash alone may have been insufficient to enable most to actually do so.”
In some cases, the payments were also correlated with less work. That is, “the transfer made it possible for them [participants] to simply take a break” from their working lives, and the “break was more valuable than the extra dollar,” the report notes.
The study also shows that while basic income helped some recipients pay for medical procedures (the study mentions a greater likelihood to seek dental care and allow themselves hospital visits), it had close to no net impact on their overall physical health. The research states:
…we find no effect of the transfer across several measures of physical health as captured by multiple well-validated survey measures and biomarkers derived from blood draws. We can rule out even very small improvements in physical health and the effect that would be implied by the cross-sectional correlation between income and health lies well outside our confidence intervals.
Elsewhere in the study, researchers note that though “the cash allowed some recipients to obtain more office-based and hospital care and may have led to reductions in alcohol and drug abuse, on average we do not find direct evidence of greater access to healthcare or improvements in physical and mental health.”
And while the basic income payments had a very positive impact on recipients’ mental health during the first year of the study (researchers note that there were “large improvements” in “self-reported measures of stress and mental distress” during this period), it had diminishing returns after that: “the transfer did not improve mental health after the first year,” the study states.
Much of the mental and physical health data seem to have come from surveys. Eva Vivalt, an assistant professor at the University of Toronto and one of the researchers involved with the program, said that the study’s findings had been derived from “incredibly detailed data with very high response rates over a long period of time from enumerated surveys, online surveys, administrative records, and a custom mobile phone app.”
All in all, the payments’ primary function was to help program participants meet their most basic needs, including affording groceries and paying rent. “Food, housing, and transportation were the largest expenditures for participants overall at the time of enrollment, and increases in these categories make up over half the estimated effect on recipients’ spending,” the report says.
Some examples of program recipients’ experiences help underscore the vast, institutional problems America faces and seem to underline the fact that a little extra discretionary cash isn’t necessarily going to solve those problems for most people. One segment, which details the experiences of a recipient named “Jeremiah,” shows, as researchers put it, “the complex relationship between health and financial stability,” and demonstrates how his basic income payment was not enough to alleviate the broader problems he faces:
Like a number of participants, Jeremiah faces long-standing health conditions that hinder his ability to maintain steady employment. Yet his precarious financial situation makes it nearly impossible to prioritize his health. For Jeremiah, the cash was one piece of the puzzle—it helped him make ends meet. Yet another crucial piece of the puzzle—in this case, comprehensive health insurance and a job that offered paid sick leave—was missing. For Jeremiah and others like him, the additional $1,000 per month alone may not be sufficient to overcome the larger systemic barriers to healthcare access and reduce health disparities.
The reasons for the study’s less-than-stellar results could likely be parsed a million different ways but one easy takeaway seems to be that solving poverty isn’t a quick and easy process. You could argue that income inequality in the U.S. is now so great and the cost of basic services (housing, education, healthcare, groceries) so high that even sending some Americans an extra $1,000 a month, while better than nothing, isn’t enough to drastically reshape the economic outlook of that person’s life.
