OpenAI CEO Sam Altman has long been a proponent of basic income, perhaps because it helps justify his vision of a future in which artificial intelligence eliminates millions of jobs and pushes large portions of the working-age population out of the workforce. But a new study funded by Altman finds that basic income probably can’t quite do what the tech mogul hoped it would.
For years, Altman has been a financial supporter of an organization called OpenResearch, which on Monday delivered its first research findings from a multiyear effort to study the impacts of basic income on a small sample of people. Between November 2020 and October 2023 (including pandemic years), the program gave about 1,000 people in some of the country’s poorest households (incomes of about $30,000 a year) $1,000 a month and then studied the impact. A control group of 2,000 people in similar economic circumstances received $50 a month.
The researchers concluded that while regular payments can help recipients pay for basics like housing, transportation, and groceries, they don’t necessarily lead to greater social mobility, and according to this study, they could certainly never replace a job (as some in Silicon Valley have suggested).
According to the researchers, basic income benefits have virtually no impact on a person’s “job quality” (i.e., ability to get a better job) and are not significant enough to lead to meaningful “investments in human capital” (education/training that can translate into better employment). It’s not that the money wasn’t useful, it’s just that it wasn’t useful. enough to help in these key areas (at least as far as this sample of the population over this specific time period is concerned). The study, which was published by the National Bureau of Economic Research, states:
…we find no impact on job quality, and our confidence intervals can rule out even small improvements. We find no significant effect on human capital investments, although younger participants may pursue more formal education. Overall, our results suggest a moderate effect of labor supply that does not appear to be offset by other productive activities.
Beyond these findings, the study shows that the regular payments had a number of mixed economic impacts on program participants. For example, the report shows that a number of participants expressed “an increased interest in entrepreneurship” as a result of the payments, although this interest did not ultimately “translate into a significant increase in entrepreneurial activity for the average recipient” by the end of the study. The report notes that while many participants “dreamed of starting their own businesses, the money alone may not have been enough to enable most of them to do so.”
In some cases, the payments were also correlated with a reduction in work. In other words, “the transfer allowed them (participants) to simply take a break” from their work lives, and that “break was more valuable than the extra dollar,” the report says.
The study also shows that while basic income helped some recipients pay for medical procedures (the study cites a greater likelihood of seeking dental care and affording hospital visits), it had virtually no net impact on their overall physical health. The study states:
…we find no effect of the transfer on several measures of physical health as captured by multiple well-validated survey measures and blood-derived biomarkers. 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, the researchers note that while “the money allowed some recipients to get more office-based and hospital-based care and may have led to reduced alcohol and drug abuse, on average we find no direct evidence of improved access to health care or improvements in physical and mental health.”
And while basic income payments had a very positive impact on recipients’ mental health in the first year of the study (the researchers note that there were “large improvements” in “self-reported measures of stress and mental distress” during this period), the results declined afterward: “the transfer did not improve mental health after the first year,” the study says.
Most of the data on mental and physical health appear to come from surveys. Eva Vivalt, an assistant professor at the University of Toronto and one of the researchers involved in the program, said the study’s findings were drawn from “incredibly detailed data with very high response rates over a long period of time from census surveys, online surveys, administrative records and a custom mobile app.”
Overall, the primary function of the payments was to help program participants meet their most basic needs, including buying groceries and paying rent. “Food, housing and transportation were the largest expenses for all participants at enrollment, and increases in these categories account for more than half of the estimated impact on recipient spending,” the report says.
Some examples of the experiences of recipients of this program help to highlight the broader institutional problems facing America and seem to underscore the fact that a little extra money won’t necessarily solve these problems for most people. One excerpt, detailing the experiences of a recipient named “Jeremiah,” shows, as the researchers put it, “the complex relationship between health and financial stability” and demonstrates how his basic income benefit has not been enough to alleviate the broader problems he faces:
Like many participants, Jeremiah has long-standing health issues that make it difficult for him to hold down a steady job. Yet his precarious financial situation makes it nearly impossible for him to prioritize his health. For Jeremiah, money was one piece of the puzzle: it helped him make ends meet. But another critical piece of the puzzle was missing: in this case, comprehensive health insurance and a job that offered paid sick leave. For Jeremiah and others like him, the extra $1,000 a month alone may not be enough to address larger systemic barriers to accessing health care and reduce health disparities.
The reasons for the study’s disappointing results can be analyzed in a thousand different ways, but it seems clear that combating poverty is not a quick and easy process. One could argue that income inequality in the United States is now so great and the cost of basic services (housing, education, health care, food) is so high that even sending some Americans an extra $1,000 a month, while better than nothing, is not enough to radically reshape the economic prospects of that person’s life.