India’s economy seems to be doing well, but not many Indians are. Securing basic amenities such as food and housing is something that a rather large sect of our population still seems to be struggling with. During these trying times, providing unconditional <keyword id="19940433" type="General" weightage="20" keywordseo="financial-assistance" source="keywords">financial assistance</keyword> to those in need might seem like the thing to do — if only things were as simple as that. This concept of a guaranteed or <keyword id="20094389" type="General" weightage="100" keywordseo="universal-basic-income" source="keywords">universal basic income</keyword> (GBI or UBI) is a form of ‘freebie’ — a term that many Indian politicians use to refer to the give-aways from the state. The concept is relevant to every part of the world facing issues around social welfare and <keyword id="19987670" type="General" weightage="20" keywordseo="economic-inequality" source="keywords">economic inequality</keyword>, the US being one of them. The very concept of government handing out money or goods and services for free invokes a sense of notion of state socialism that is usually at the loggerheads with the current economic model of capitalism. But as the economic divide widens, is there some merit to this idea of state helping the poorest? This is where results of the experiment conducted by <keyword id="257641" type="General" weightage="20" keywordseo="sam-altman" source="Orion">Sam Altman</keyword>’s <keyword id="22626820" type="General" weightage="20" keywordseo="OpenResearch" source="keywords" meta.keywordsubtype="org" meta.entityname="OpenResearch" meta.hostid="261" meta.entityid="OpenResearch">OpenResearch</keyword> could help shed some much-needed light on this pervasive issue. <h2>Upward economic mobility through GBI</h2>The three-year study, conducted by OpenResearch — a nonprofit research organisation backed by OpenAI CEO Sam Altman — explored the impact of a $1,000 monthly, no-strings-attached cash transfer on lower-income individuals. This study is the most extensive of its kind yet, providing compelling evidence on how such cash payments can help families meet basic needs. “We’re all finding the same results,” said Stacia West, co-founder and director of the University of Pennsylvania’s Center for <keyword id="20267224" type="General" weightage="20" keywordseo="guaranteed-income" source="keywords">Guaranteed Income</keyword> Research. “You give people cash, and they make great decisions for themselves and their family in a way that promotes upward economic mobility." Initiated in 2020, the study involved 3,000 lower-income participants from Illinois and Texas. One thousand participants received $1,000 monthly, while a control group of 2,000 participants received $50 monthly. Researchers highlighted that cash payments offer critical flexibility, allowing recipients to address their diverse and shifting needs. Here are some key findings: <ul><li>Spending patterns: increased spending by an average of $310 per month, primarily on essentials like food, housing and transportation. </li><li>Passing on the gift: $22 more was spent monthly on financial support for others, including gifts, loans, donations and alimony.</li><li>Work and leisure: Recipients worked 1.3 hours less per week than the control group, enjoying more leisure time while remaining active in the workforce.</li><li>Healthcare utilisation: 26% increase in hospital visits and a 10% increase in dental and emergency room visits. </li><li>A notable decrease in problematic alcohol and some illicit drug use was also reported.</li><li>Mobility and housing: 4.4 percentage points more likely to move neighborhoods. Future analyses will explore the impact of cash transfers on housing stability and neighborhood quality.</li><li>Entrepreneurial activity: Especially among Black and female recipients, there was a higher likelihood of having a business idea and starting a business within five years.</li></ul>However, cash payments were not a panacea. The study found no significant effects on physical health, healthcare access, or behaviors like exercise and sleep. Improvements in stress, mental distress, and food security were observed primarily in the first year, with these benefits fading by the second year due to factors like inflation and the end of pandemic-era aid. <h2>A push towards guaranteed basic income</h2>Sevly Snguon, co-founder and co-chair of the Guaranteed Income Health Consortium at Johns Hopkins Bloomberg School of Public Health, emphasised that guaranteed income is one piece of the puzzle. “There’s still a need for additional resources for parents, affordable housing, and healthcare,” Snguon noted. “But guaranteed income helps during key transition periods.” OpenResearch plans to release further findings on the effects of cash transfers on housing outcomes, political attitudes, and recipients’ children in the coming months. The idea of GBI has garnered support from various tech industry leaders, including OpenAI’s Sam Altman. In a 2016 blog post, Altman expressed his interest in basic income as a response to technology-driven job displacement, envisioning a future where such initiatives could help eliminate poverty. Notable advocates like former Twitter CEO Jack Dorsey and Tesla CEO Elon Musk have also supported GBI, leading to the launch of numerous pilot programs across the country. Research shows that basic income can significantly reduce poverty. For instance, a 2020 study by Columbia University found that $250 monthly payments could reduce poverty by 40%. <h2>Battling public opinions and other challenges</h2>Despite promising research, GBI faces opposition. A 2020 Pew Research Center survey found that over half of US adults opposed a universal basic income of $1,000 a month, with the greatest opposition among white adults. Some states, including Iowa and South Dakota, have even passed legislation to prevent local governments from implementing such programs, arguing that they might discourage work. Sara Kimberlin, executive director of the Stanford Center on Poverty and Inequality, notes that the impact of basic income on employment varies. While some studies show increased employment, others indicate a decrease, often for positive reasons like caregiving. “There really isn't anywhere in the United States where someone can live on just $1,000 a month,” Kimberlin said. “So of course people are working and have other income sources, with needs that go beyond what $1,000 a month can cover.” India faces similar challenges. GBI is usually included under the umbrella of ‘<keyword id="6373539" type="General" weightage="20" keywordseo="freebies" source="Orion">freebies</keyword>’ in the country and is often thought of as political parties’ way to curry the public’s favour ahead of the elections. However, several research studies have shown that some of these measures such as free television, transportation, and groceries can act as a safety net for the poorest, contributing to sustainable development goals like no poverty and no hunger. For now, the OpenResearch study provides valuable real-world insights into the potential of GBI to support lower-income families. While not a cure-all, cash payments offer significant benefits, helping recipients navigate economic challenges and improve their quality of life, the study has shown. As more research unfolds, the push for guaranteed basic income continues to evolve, aiming to create a more equitable and secure future for all. <div type="Article" hostid="261" msid="112090873" title="The director of Sam Altman&amp;#39;s basic income study says one of the most interesting results was an increased interest in starting a business" mstype="2" mssubtype="0"></div>

Universal basic income: Should the government give ‘unconditional money’ or ‘freebies’ to the poor?

<ul class="summary-list"><li>OpenResearch's study gave monthly stipends to 3,000 low-income Americans.</li><li>Funded in part by OpenAI CEO Sam Altman, the study explored the impact of basic income payments.</li></ul>What happens when you give people $1,000 a month? They start thinking about launching a business.Earlier this month, the nonprofit OpenResearch published the <a target="_blank" href="https://www.businessinsider.com/sam-altman-basic-income-study-results-2024-7">results of a study</a> in which it gave $1,000 a month in cash payments to low-income residents in urban, suburban, and rural areas of the United States.The study, funded in part by <a target="_blank" href="https://www.businessinsider.com/sam-altman-chatgpt-openai-ceo-career-net-worth-ycombinator-prepper-2023-1">OpenAI CEO Sam Altman</a>, was driven by Altman's belief that recurring basic income payments might be necessary for an age when AI could make many jobs obsolete.Many in the AI industry support a so-called <a target="_blank" class="" href="https://www.businessinsider.com/universal-basic-income-ubi-dave-ramsey-show-karl-marx-playbook-2024-7">universal basic income</a>, which would give regular payments to all people regardless of their financial status. Given the political hurdles such a program would face, many cities are experimenting with a guaranteed basic income on a smaller level instead. Altman's study tested this version of a basic income."So technically, this is not a UBI, because if it were, there would be no income requirement, no age requirement. Every single person within a community would get it. And obviously, that's really difficult to test," OpenResearch's director, Elizabeth Rhodes, said on an <a target="_blank" href="https://www.nytimes.com/2024/07/26/podcasts/kamala-harriss-bratty-coconut-memescape-what-does-1000-a-month-do-the-empire-crowdstrikes-back.html">episode of the New York Times podcast Hard Fork</a>. "We're testing more unconditional cash."Most participants allocated their monthly stipends toward rent, transportation, and food. Over time, though, the money also contributed to a shift in their mindset."One of the things that I found interesting was the growing interest in entrepreneurship and having ideas for businesses," Rhodes said. "And in a lot of ways, I feel like it gave people some space to sit back and think about what would they do if they had more opportunities."The reality is that many low-income <a target="_blank" href="https://www.businessinsider.com/alice-living-paycheck-to-paycheck-without-government-assistance-snap-medicaid-2024-5#:~:text=The%20latest%20figures%20from%20United,the%20US%20are%20considered%20ALICE.">Americans are living paycheck to paycheck</a>, taking odd jobs, or overnight shifts. "There are a lot of people, I think, now that are just surviving and maybe work is not providing that sense of meaning and they don't have those choices," Rhodes said.

The director of Sam Altman's basic income study says one of the most interesting results was an increased interest in starting a business

<ul class="summary-list"><li>The results of OpenAI CEO Sam Altman's guaranteed-basic-income study are in.</li><li>Overall spending increased, but most of the extra cash went to food and rent.</li></ul>The results are in for Sam Altman's much-anticipated basic-income study, one of the largest of its kind. The experiment gave low-income participants $1,000 a month for three years, no strings attached.Recipients put the bulk of their extra spending toward basic needs such as rent, transportation, and food, the study found. They also worked less on average but remained engaged in the workforce and were more deliberate in their job searches compared with a control group."Recipients had greater agency to make decisions that worked best for their lives and to prepare for the future, from moving neighborhoods to expressing interest in new business ventures," the report's authors said.Altman, the CEO of OpenAI, a leading artificial-intelligence company, raised $60 million for the study, including $14 million of his own money. <a target="_blank" class="" href="https://www.openresearchlab.org/studies/unconditional-cash-study/study">OpenResearch</a> conducted the study, which was led by the researcher Elizabeth Rhodes.It officially began in 2019 when 3,000 Texas and Illinois residents across urban, suburban, and rural areas enrolled. All of these residents had incomes below $28,000. A third got $1,000 a month for three years, while the rest — the control group — got $50 a month. No enrolled participants lost their existing benefits.The study found that those who received the $1,000 payments increased their overall spending by an average of $310 a month, but most of that spending went toward food, rent, and transportation. They also offered more financial support to others in need compared with the control group.Researchers, however, said they found no "direct evidence of improved access to healthcare or improvements to physical and mental health" among those who received $1,000 payments."We do see significant reductions in stress, mental distress, and food insecurity during the first year, but those effects fade out by the second and third years of the program," the report said, noting that $1,000 a month could only do so much. "Cash alone cannot address challenges such as chronic health conditions, lack of childcare, or the high cost of housing."<h2 id="f9fd84cd-91cb-426e-86a2-3a3a6135eb76">The debate over basic income</h2>The study was inspired by Altman's belief in the importance of a basic income in the age of AI, which some fear could render millions of jobs obsolete."It's impossible to truly have equality of opportunity without some version of guaranteed income," Altman said when announcing the project.The idea of a <a target="_blank" class="" href="https://www.businessinsider.com/how-people-spend-universal-basic-income-ubi-food-housing-transportation-2024-4">universal basic income</a> has been around for a while but rose to prominence as the center of Andrew Yang's 2020 presidential campaign. Other significant figures in the tech industry have since voiced support for some kind of basic income, including the Twitter cofounder Jack Dorsey and Tesla CEO Elon Musk. The AI godfather <a target="_blank" class="" href="https://www.businessinsider.com/ai-godfather-geoffrey-hinton-universal-basic-income-2024-5">Geoffrey Hinton recently advised the British government</a> to adopt a universal basic income to mitigate the number of "mundane jobs" AI could replace.A universal basic income would provide all people with direct cash payments, no strings attached. That's a hefty political lift, however. So many cities and states have experimented with guaranteed basic incomes instead. These programs provide cash payments without restrictions to select low-income or vulnerable populations. Altman's study falls into this camp as well.Data from dozens of these smaller programs have found that cash payments can help alleviate homelessness, unemployment, and food insecurity — though results still stress the need for local and state governments to invest in social services and housing infrastructure.Earlier this year, Altman also floated another kind of basic-income plan, which he called a "<a target="_blank" class="" href="https://www.businessinsider.com/openai-sam-altman-universal-basic-income-idea-compute-gpt-7-2024-5">universal basic compute</a>." In this scenario, Altman said, people would get a "slice" of the computational resources of the large language model GPT-7, which they could use however they liked."You own part of the productivity," he explained on a <a target="_blank" class="" href="https://podcasts.apple.com/us/podcast/all-in-with-chamath-jason-sacks-friedberg/id1502871393?i=1000655220554">podcast</a>.Even these smaller experiments, however, have <a target="_blank" class="" href="https://www.businessinsider.com/basic-income-opposition-discriminatory-universal-basic-income-argument-2024-4">faced political hurdles</a>. Conservatives in several states have challenged the programs, halting their progress.<h2 id="8ac87517-0da8-463d-9395-bf25b14d1489">The Altman study's findings</h2>In its results, Altman's study assessed both quantitative data, such as surveys and bank transactions, and qualitative data, such as interviews with recipients.The study found that compared with the control group, recipients' total individual savings in their bank accounts increased by nearly 25%. Recipients also spent $22 more a month on other people, or about 26% more than the control group. There was little impact on car or home ownership, though recipients of the $1,000 were more likely to move neighborhoods or pay for housing than the control group.Regarding healthcare, recipients saw slight increases compared with the control group in dental care, emergency-room visits, and healthcare spending — though there was no direct evidence of improved health.Recipients were more likely to want to have a budget and advance their education, specifically in the third year, compared with the control group. But there were no significant effects on educational attainment overall.The study, which began during the COVID-19 pandemic when unemployment was high, found that employment rates fell in the second and third years among recipients compared with the control group. On average, incomes rose significantly for all groups, though slightly higher for the control group. Incomes for recipients of the $1,000 rose from just under $30,000 to $45,710, while incomes for the control group started at a similar level but grew higher, to $50,970."Cash offers flexibility and may increase agency to make employment decisions that align with recipients' individual circumstances, goals, and values," the report's authors said.<h2 id="78870e8c-3763-4a7c-a1d2-a8d6bae99891">What the participants in Altman's basic income study say</h2>One recipient in the program, Sarah, is a mother of four from rural Illinois who teaches in a homeschool network and makes just enough from her job to pay for school supplies."I don't really make anything off of it," she said in a testimonial shared by OpenResearch. "Even though my husband had a pretty decent job, we didn't have a lot of money for extras."The payments from the Altman program helped Sarah pay for braces for both of her children, which weren't covered by their insurance, she said. She also used the money to finance a graduation trip for her daughter.But Sarah said she began "slipping into a mindset" in which she was less careful with her finances because it felt as if money was coming in "without having to work for it.""Looking back, I regret that I didn't save more of it," she said.Another recipient, Cara, told the study's researchers that she suffered from a debilitating nerve disorder that caused pain across much of her body and a loss of mobility.While she started to receive some short-term disability payments, she said a break-in to her apartment set her back financially, and she began to sell her personal belongings."Feeling the loss of being able to care for yourself and desperately needing the help of others; it's rough," Cara said.She said she "probably started crying" when she got the phone call saying she would be receiving $1,000 payments from the Altman program. The money helped her pay off nearly all of her debts."It's almost like a miracle," she said. "Knowing that I was able to manage that mountain of medical debt, it felt like my brain would have been in a completely different place."Celene, another participant, told researchers she was forced to move her family in with a friend after losing money in a business venture. She said she was living in squalid conditions.When she received the call that she had been selected for the group receiving $1,000 a month, she was in utter disbelief.She said the money helped her buy new clothes, shoes, and necessities for herself and her children. By the second month, she had landed a job and began saving.The money helped her "not feel like a failure as a parent," she said, and gave her the confidence to make decisions in her family's best interests.Correction: July 22, 2024 — An earlier version of this story misstated when Andrew Yang ran for president. It was in 2020, not 2016.

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Universal basic income: Should the government give ‘unconditional money’ or ‘freebies’ to the poor?

Ashmita Gupta

The director of Sam Altman's basic income study says one of the most interesting results was an increased interest in starting a business

Lakshmi Varanasi

Sam Altman's basic-income study is out. Here's what it found.

Noah Sheidlower,Kenneth Niemeyer,Katie Balevic,Lakshmi Varanasi