The largest US basic income study showcases its pros and cons
Image: What If Economics
In recent years, the concept of ābasic incomeā ā no-strings-attached cash transfers to everyday citizens, often targeting low-income groups ā has surged in popularity across America, leading to ~150 such pilot programs in 35 US states.
The largest of these studies comes from OpenResearch, a project backed by OpenAI founder/CEO Sam Altman, which recruited participants for its trial starting in 2020.
- Over the following three years, OpenResearch gave 1,000 lower-income people in Illinois and Texas $1,000/month with no strings attached, while a control group of 2,000 others received $50/month.
The results are in
In a pair of research papers published Sunday, OpenResearch says it found a wide range of positive and negative impacts associated with its basic income pilot study.
First, the positive: Recipients of basic income mostly used the funds to buy essentials like food, rent, and transportation, with the largest increase in spending going towards financial support for family and friends.
- Additionally, participants receiving basic income were able to dedicate more time to their health care, with 26% more hospital visits than the control group.
- They also had a higher chance of going to the dentist, and reported cutting down on taking unprescribed painkillers and excessive drinking.
On the flip side: Researchers say the basic income payments had virtually no impact on the recipientās ability to get a better job, or invest in additional education or training.
- They also conclude the transfers ādid not improve participantās long-run financial position,ā due in part to a slight cutback in working hours (many times because of childcare/family reasons) and increased borrowing (as recipients took on more car loans and mortgages).
- And, while the study shows basic income helped some recipients pay for medical procedures, researchers say they ādo not find direct evidence of greater access to healthcare or improvements in physical and mental health.ā
Looking aheadā¦ The OpenResearch team is planning to release more analysis on the impact that basic income had on the educational outcomes of recipientsā children.
š Flash poll: Would you be in favor of a government program that provides basic income to lower-income Americans with no strings attached?
See a 360Ā° view of what media pundits are saying ā
Sprinkles from the Left
- Some commentators argue that implementing basic income programs as policy would be premature, since the major flaw in all such experiments to date is that they are temporary and involve small groups.
- Others contend that guaranteed income programs are an investment in the power and potential of the American people and the strength of our communities, and should be promoted by lawmakers and private citizens.
- āGuaranteed Income Plans Only Work in Studies ā So Farā āKarl W. Smith, Bloomberg
- āGuaranteed income is the āsolution to povertyā we need across Americaā āFormer Stockton Mayor Michael Tubbs (D) and Texas state Sen. Rodney Ellis (D)
- āGiving $500 a month with no strings attached? Fresno program rightly targets povertyā āFresno Bee Editorial Board
Sprinkles from the Right
- Some commentators argue that supporters of basic income programs fail to answer the key question of where the money for such initiatives will come from, especially when Covid-era funding dries up.
- Others contend that basic income programs arenāt a poverty cure-all, would be too costly, and would introduce more perils than benefits by breeding government dependence and removing the incentive to work.
- āBasic incomeās basic question ā who will pay?ā āBoston Herald Editorial Board
- āUniversal Basic Income Is a Moral Hazardā āChris Talgo, The Heartland Institute
- āGuaranteed universal basic income programs trap people in dependencyā āVictoria Eardley and Haley Holik, Dallas Morning News
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