What Happens When You Just Give People Money? Sam Altman’s UBI Experiment

What Happens When You Just Give People Money? Sam Altman’s UBI Experiment

Author: Koutian Wu; GitHub: ktwu01

In 2020, as the world was grappling with a pandemic and the accelerating rise of AI, a quiet but consequential experiment began in Texas and Illinois. For three years, 1,000 low-income adults received $1,000 every month — no strings attached, no conditions, no questions asked. Another 2,000 people received just $50 a month as a control group.

The experiment was funded by OpenResearch, a nonprofit backed by OpenAI CEO Sam Altman. The results, published in July 2024, are the most comprehensive data we have on Universal Basic Income (UBI) in the United States — and they’re more nuanced than either its champions or critics expected.

Why Altman Cares About This

Altman has been thinking about UBI since at least 2016, when he wrote a blog post on Y Combinator’s site asking: “Do people sit around and play video games, or do they create new things? Are people happy and fulfilled?”

The subtext is hard to miss. Altman leads the company building the technology most likely to automate away large swaths of human labor. If AI does eliminate traditional jobs at scale, society will need a mechanism to keep people afloat. UBI is the most discussed candidate. So he funded the largest randomized controlled trial of unconditional cash transfers ever conducted in the US to find out if it actually works.

What the Data Actually Shows

People worked a little less — but didn’t stop

Recipients of the $1,000/month payments worked about 1.3 to 1.4 fewer hours per week compared to the control group. Overall labor force participation dropped by roughly 2%. That’s a real effect, but a modest one. As Eva Vivalt, an economics professor at the University of Toronto and one of the study’s principal investigators, put it: “From an economist’s point of view, it’s a moderate effect.”

Crucially, people didn’t quit and disappear. They reclaimed time — and used it for leisure, caregiving, and job searching.

The money mostly went to basics

Recipients increased their spending by about $310 per month on average. Most of that went to rent, food, and transportation — the fundamentals. They also gave more financial support to others in need compared to the control group.

Net wealth didn’t grow much

Here’s the catch: because people worked slightly less, some of the $1,000 was offset by reduced wages. The cash gave people breathing room, but it didn’t compound into long-term wealth accumulation in any significant way.

The “better job” hypothesis didn’t pan out

Researchers expected that having a financial cushion would let people hold out for better-paying work. That didn’t happen. “We don’t find any effects on the quality of employment whatsoever,” Vivalt noted. People used the time for leisure and caregiving more than for strategic career moves.

Health outcomes were mixed

Recipients visited doctors and dentists more — a 26% increase in hospitalizations and a 10% increase in emergency department visits. This likely reflects people finally getting care they’d been deferring, not a decline in health. But long-term health improvements weren’t clearly demonstrated.

What This Experiment Doesn’t Prove

UBI advocates sometimes paint it as a cure-all. The data pushes back on that.

Health and education didn’t improve significantly. A monthly $1,000 payment didn’t produce measurable long-term gains in physical health, mental health, or educational attainment. Structural barriers — lack of access to quality healthcare, underfunded schools, entrenched inequality — don’t dissolve because someone has a bit more cash.

It’s a floor, not a ladder. The experiment confirmed that unconditional cash can relieve acute financial stress and give people more agency over their time. It cannot, by itself, fix the underlying architecture of inequality.

The Real Takeaway for the AI Era

The experiment’s most honest finding is this: money buys freedom of choice, not transformation of circumstance.

Recipients used the cash to escape the worst of their situations — to say no to a bad job, to spend an afternoon with their kids, to finally see a doctor. That’s genuinely valuable. But the structural problems — poor job markets, inadequate healthcare, educational gaps — remained intact.

For the AI era, this is both reassuring and sobering. Reassuring because UBI could serve as a meaningful safety net if automation displaces workers at scale. Sobering because a safety net is not the same as a thriving society. If we arrive at a future where AI does most of the work and humans receive a monthly stipend, the quality of that future will depend on far more than the size of the check.

Healthcare, education, social mobility, and the meaning people derive from work — none of those come bundled with a direct deposit.

Sources: CBS News, OpenResearch Unconditional Cash Study, The Register, Futurism