A thousand people received a thousand dollars every month. What did they do with the money?

Sam Altman, the man behind OpenAi and ChatGpt, announced already in 2016, on the blog of one of the largest startup accelerators in the US, that he intends to conduct an experiment in Universal Basic Income (UBI) with the aim of testing what people do when they are given more financial freedom. “Do people sit and play computer games, or create new things?”, he wrote then, “Do people, without the fear of not being able to eat, achieve more and be more useful to society? And do they create more economic value than what they receive?”

These questions seemed particularly relevant to Altman in light of the thought that artificial intelligence tools will eliminate quite a few jobs, and there will be no choice but to provide a basic income for people who have lost their ability to earn a living. For the past three years, research done as part of OpenResearch, a laboratory funded by him, has examined these very questions among households in Texas and Illinois. This week some of the results of the experiment were published, and more articles are expected to be published later.

More choice, less income

1,000 low-income families in Texas and Illinois, USA, received $1,000 each month. The control group, which included 2,000 people (randomly selected from the same sample), were given only $50 per month. Over three years, the researchers examined the effects of these amounts on both groups , through questionnaires, tracking health indicators and physical tests.

The first and most striking finding is that the rate of participation in the labor market was 2% lower on average than the control group (even though in both groups there was a total increase over the three years). Those who worked reduced their working hours by 1.3 to 1.4 hours per week, so that on average the income decreased by about 1,500 dollars per year.

The household income decreased by a higher amount than the amount of the basic income given to the participants of the experiment, but according to the researchers this is not necessarily a bad thing: they emphasized the high value that the participants attributed to their leisure time and the importance of expanding the choices they had before them, what also from an economic point of view the decrease in work was quite moderate.

The salary did not increase, contrary to expectations

The researchers expected that eventually the transfer of money would lead to an increase in wages, because the recipients of the payment would be able to spend more time looking for higher quality and more lucrative jobs. But the quality of employment has not improved.

The study found no evidence that people quit bad jobs so they could comfortably look for better jobs. Reducing working hours increased leisure time, which is of course important in itself, but did not result in the creation of greater economic value, at least not in the three years of the experiment.

As far as increased entrepreneurial activity, which Altman hoped to see following the distribution of the money, the researchers found no significant change. Although the recipients of the payment demonstrated a greater willingness to take risks and expressed more interest in entrepreneurship, the researchers did not see the interest turn into actual actions.

Was the money used to purchase an education? In total, no significant difference was found between the groups, but a difference was found between the adults and the young. While the financial transfer had almost no effect on adults going to school, the young people (in their 20s) actually entered a little more formal education programs, which will be able to enjoy their fruits in the long run. However, the researchers note, this group further reduced its participation in the labor market.

Temporary improvement in health and stress

The findings regarding health and mental well-being were published in a separate article, and it also presents mixed results. The researchers did see an improvement in the reporting of stress levels and food security, but very quickly they returned to their previous levels, before the transfer of the money.

The trial participants could afford to spend more on health care, an expensive affair in the US – they visited the hospital more frequently and spent more money on dental treatments, but this did not lead to an improvement in their physical health.

“We can rule out even very slight improvements in physical health,” the researchers write, “and we also find that the money transfers did not improve mental health after the first year, and in the second year we can again rule out even very slight improvements.”

In their published article, the researchers write that to reduce health inequalities, more targeted interventions may be more effective.

Research with many nuances

In the last 50 years, experiments have been carried out all over the world on a larger and smaller scale in providing a basic income, with the hope that it will be possible to give government aid to disadvantaged populations without the problem of negative incentives that usually accompanies it. But it seems that the road to seeing the gold that will lead to the replacement of traditional welfare programs is still long.

The results of the current experiment are complex and have many nuances. While some of the results indicate positive effects of increasing income, the money given unconditionally did not lead to major changes in the behavior of its recipients, but there was variation due to income level, age and other external factors.

Altman himself did not comment on the results and only tweeted at X that he was proud of the work of the research group. The entire project was accompanied by quotes from the participants in the experiment, who told about the relief they received as a result of receiving the same 1,000 dollars a month. “As a parent, I could take care of my children’s needs and give them money for trips,” said a mother from Illinois, for example. “It helps me breathe better. It helps my head to be a little clearer because I didn’t feel like such a failure.”

Eva Violet, one of the researchers, summed it up like this: “Policymakers may prefer that people work more, because of the externalities, but if the participants really value free time and it improves their well-being, it’s good to know.”