Sam Altman's Basic Income Study: What Are the Results?

OpenAI CEO Sam Altman conducted a basic income study that gave low-income residents US$1,000 each month for three years. The results are now in and reveal that most of the money was spent on basic needs and reduced financial stress, but did not lead to significant improvements in long-term health.

How did it work: The study, funded with US$60 million, including US$14 million from Altman himself, was conducted by OpenResearch under the direction of researcher Elizabeth Rhodes. Launched in 2019, the study involved 3,000 residents of Texas and Illinois with annual incomes of less than US$28,000. One-third of the participants received US$1,000 per month with no conditions, while the control group received US$50 per month. 

Spending Patterns: The study found that program beneficiaries increased their total spending by an average of US$310 per month. Most of this additional spending was on basic necessities. Spending on food rose by approximately US$150 per month, spending on rent increased by about US$100 per month, and spending on transportation went up by about US$60 per month. 

Impact on Financial Stress: During the first year of the program, there was a notable reduction in financial stress among beneficiaries, with a 30% decrease in average financial stress survey scores. However, this positive effect was not sustained over time. In the second and third years of the program, the reduction in stress leveled off and returned to levels similar to those of the control group.

Labor Force Participation: Program beneficiaries worked on average four hours less per week compared to the control group. Despite this reduction in hours worked, beneficiaries continued to actively participate in the labor force and showed increased interest in job search. The rate of participation in job training programs and employment opportunities increased by 15% among beneficiaries, indicating greater deliberation in pursuing job opportunities, despite working fewer hours overall.

Health Effects: The study found that beneficiaries increased their spending on medical and dental care by 12% compared to the control group. Additionally, there was a 10% increase in emergency room visits among beneficiaries. However, no significant improvements in physical or mental health were observed. Average scores on the mental and physical health surveys showed a marginal increase of 2-3 points on a scale of 0 to 100, with no significant difference from the control group, suggesting that the basic income did not have a noticeable impact on long-term health.

Savings and Financial Support: Beneficiaries' individual savings in their bank accounts increased by 25% during the study, from an average of US$1,000 to US$1,250 at the end of the period. Additionally, beneficiaries spent an average of US$22 more per month on supporting others, an increase of 26% compared to the control group. This increase in savings and spending on support for others indicates that the program allowed participants more financial flexibility to manage their resources and assist those in need.

Residential Mobility: During the study period, 20% of the beneficiaries moved to a new neighborhood, compared to 10% of the control group. This greater residential mobility was associated with the beneficiaries' ability to improve their living conditions.

Education and Personal Development: In the third year of the program, beneficiaries showed an 18% increase in participation in continuing education courses and training programs compared to the control group. Although there was an increase in interest in education, no significant improvements in overall educational attainment were observed, suggesting that although the basic income enabled participants to access educational opportunities, it did not translate into outstanding educational achievements.

Employment and Income: Employment rates among beneficiaries decreased by 7% during the second and third years compared to the control group. Despite this decline in employment rates, the average earnings of beneficiaries increased from US$29,900 to US$45,710 during the study period. In comparison, the control group's earnings increased from US$29,800 to US$50,970. 

Beneficiary Testimonials:

"Program payments helped me pay for braces for my children and fund a graduation trip for my daughter," said Sarah, a mother of four from Illinois. "However, I admit that I started to be less careful with my finances because I felt the money was coming in without having to work for it. Looking back, I regret not saving more."

"When I was informed that I would receive payments of US$1,000, I felt it was almost a miracle. The money allowed me to pay off almost all of my debts and helped me through a difficult financial situation after a break-in at my apartment. I felt that my financial and mental situation improved significantly," stated Cara, a resident affected by a nervous disorder.

"The money helped me buy new clothes and basic items for my children. By the second month, I got a job and started saving," said Celene, a participant who prior to the program moved in with a friend because she lost her job. "This financial support gave me the confidence to make decisions that benefited my family and helped me not feel like a failed mother."

Context of the Study

The motivation behind the study stems from fears that technological advancement, especially in the field of artificial intelligence, could make many jobs obsolete, exacerbating economic and social inequality. Altman and other advocates believe that a guaranteed basic income could provide a financial safety net, allowing people to adapt to these changes without falling into poverty.

Elon Musk, along with other influential CEOs such as Mark Zuckerberg, Richard Branson, and Stewart Butterfield, has expressed strong support for universal basic income as a necessary solution to address the challenges posed by automation and advanced technology. 

Musk, founder of Tesla, has repeatedly emphasized that universal basic income could be a key solution as physical labor becomes a choice and robots take on more tasks. 

"The future of work and automation make it likely that this measure will be implemented to ensure that people can engage in more interesting and complex activities," musk stated for Forbes. 

While the idea has found support among these technology leaders, not all share the same view; Bill Gates has expressed reservations, arguing that the ability of states to implement a universal basic income is still limited and that, rather than reducing jobs, technology will transform the labor market.

Basic Income in Politics

Although implementing a universal basic income faces political challenges, many local governments have embraced it. In 2018, Finland conducted an experiment in which 2,000 unemployed beneficiaries received an unconditional monthly basic income for two years. The objective was to assess the effects of basic income on well-being and job search. 

Similarly, the city of Stockton and Santa Clara County in California have implemented basic income pilot programs, providing monthly payments to low-income residents to study the effects on their well-being and financial stability.