OpenAI CEO Sam Altman’s decade-long effort to understand how handing out free money affects its recipients and the broader economy produced its first major results on Monday. OpenResearch found that when it gave some of the poorest Americans $1,000 a month for three years with no strings attached, they spent much of the money on basic necessities like food, housing and transportation. But what amounted to $36,000 wasn’t enough to significantly improve their long-term physical or financial health, researchers concluded.
Early results from what OpenResearch, an Altman-funded research lab, describes as the most comprehensive study of “unconditional money” show that while the subsidies had their benefits and weren’t spent on things like drugs and alcohol, they were hardly a panacea for addressing some of the biggest concerns about income inequality and the prospect of AI and other automation technologies taking over jobs.
Some progressive organizations in the U.S. and elsewhere have advocated for combating poverty through forms of unconditional money, such as universal basic income. Conservative groups have largely criticized the projects as handouts for undeserving people who refuse to work. In two papers published Monday and a third due next month, OpenResearch staff and their university collaborators offer data that could inform the full spectrum of views.
OpenResearch, which has also received funding from organizations including OpenAI and the U.S. government, distributed the unconditional $1,000 transfers from November 2020 to October 2023. The money boosted incomes by 40 percent for a diverse group of 1,000 people between the ages of 21 and 40 who started in households earning about $30,000 annually in 10 counties in Illinois and Texas. As a control group, 2,000 people with similar characteristics received $50 per month. Participants completed surveys, shared credit reports and took blood tests.
The perceived benefits for those receiving $1,000 per month varied by life stage. Their biggest spending jump came from giving an average of $22 more per month to others, such as helping family members in need or giving gifts to friends. People sought out more health care, such as braces, and began stocking their refrigerators and pantries more.
Some began considering or pursuing startups. In the third year of payments, “black recipients were 9 percentage points more likely to report starting or helping start a business than control participants, and women were 5 percentage points more likely,” according to one of the studies.
Participants also moved out on their own, especially those who started with the lowest incomes, and enjoyed themselves more. The forthcoming paper, a draft of which OpenResearch shared with WIRED, estimates that about 81 cents of every dollar transferred went toward increased spending on things like housing, 22 cents toward leisure, and -3 cents toward increased borrowing as recipients took out more car loans and mortgages.
The increased debt reduced participants’ net worth over the three years. Combined with little change in credit access, bankruptcies, and foreclosures, researchers concluded that “the transfer did not improve participants’ long-term financial position.” People did put more money into savings and initially felt better about their financial situation. But they also cut back on their work somewhat, letting the free money fill the gap. For every $1 they received from OpenResearch, participants’ earnings excluding the free money fell by at least 12 cents, and their total household income fell by at least 21 cents.
“Money provides flexibility and can increase the ability to make employment decisions that fit recipients’ individual circumstances, goals, and values,” the researchers wrote. They can “take more time to find a job, take a lower-paying position that they find more meaningful, or simply take a break.”
What critics of aid programs fear is that instead of investing in the future, people will eventually stop working altogether and become increasingly dependent on support. OpenResearch found in its experiment that “the total amount of work taken off the market” was “quite substantial.”
Add to that the fact that researchers found “no effect” of the money on several measures of physical health and well-being, and critics may have plenty to snarl about. But the study authors say it’s important to remember that participants were showing what they valued most with their spending. “Policymakers should take into account that recipients have demonstrated—through their own choices—that they value time away from work,” the authors wrote. If there’s one thing OpenResearch has proven, it’s the adage: Money can buy time.
