For eight years, researchers have quietly conducted one of the most comprehensive studies on guaranteed income programs—initiatives that provide people with a monthly cash payment, no strings attached. The question they sought to answer: does this kind of income truly change lives over time? Now, the results are in.
Led by OpenResearch, a nonprofit founded by OpenAI CEO Sam Altman, the study tracked 3,000 people from 2020 to 2023. It offers a detailed look at how guaranteed income programs, which have been implemented in more than 150 places since 2018, affect recipients. These programs have reached over 50,000 people, often focusing on low-income women, parents, and people of color.
Gauging impact
The researchers wanted to understand the role cash transfers play in improving lives. Elizabeth Rhodes, the study’s lead researcher, compared the question to asking, “Is food good?” The key was to see what effect the money had in different settings.
Participants were split into two groups: 1,000 people received $1,000 a month for three years, while the rest received $50 a month to serve as a control group. This smaller amount was given to keep them engaged in the study.
The participants, aged 21 to 40, were drawn from rural, suburban, and urban areas in Illinois and Texas. They represented a typical sample of low-income Americans, with an average household income of $30,000. Throughout the study, they completed surveys monthly and annually, and a smaller group took part in in-depth interviews. Notably, 97% of participants completed the surveys.
Spending on essentials
The data quickly showed that those receiving $1,000 a month spent more on essentials. Compared to the control group, they spent more on food, rent, and transportation. They also provided more financial support to family members, indicating that the benefits extended beyond the direct recipients.
Many participants reported that the extra money allowed them to move beyond living paycheck to paycheck and start planning for their futures. Those receiving $1,000 were 5% more likely to report having a budget and spent more time managing their finances. The money also influenced their decisions on healthcare, education, and job choices, though the effects varied widely among individuals.
The study highlighted that while cash is a flexible tool, its impact depends on the person’s circumstances.
Giving us autonomy
Supporters of guaranteed income argue that it gives people autonomy, while critics claim it discourages work. The study found that those receiving $1,000 a month worked about 1.3 fewer hours per week than those receiving $50, but the reasons were complex. Younger participants often pursued education or job training, while single parents sometimes reduced their work hours to focus on childcare.
One participant, who received $1,000 a month, shared that the money allowed her to leave her job to homeschool her child, who had been diagnosed with autism. Others, especially women, used the funds to take on more flexible jobs, even if they paid less, to spend more time with their children.
The extra income also enabled some to reduce their workload or be more selective in their job choices. One participant accepted a lower-paying job with better promotion prospects, which led to a higher-paying position within two years.
The study was conducted during the pandemic, a time when many people lost jobs, childcare options dwindled, and government assistance increased through enhanced unemployment benefits and a larger child tax credit.
Helping marginalized groups
Guaranteed income has long been seen as a way to help marginalized groups, including communities of color, women, and LGBTQ+ individuals. The study found that by its third year, Black participants receiving $1,000 monthly were 26% more likely to start a business than those receiving $50. Women, regardless of race, were 15% more likely to do so.
However, the researchers caution that while the extra money helps, it doesn’t address larger issues like access to capital, homeownership, or healthcare. For example, those receiving more cash were slightly more likely to seek medical care, but overall improvements in health were limited.
The timing of the cash also matters. In Flint, Michigan, a program called Rx Kids gives expectant mothers $1,500 during pregnancy and $500 a month during their child’s first year. This initiative aims to support families at a critical time—right before and after a child’s birth.
Globally, about 40 countries offer cash support to parents, though in the U.S., the closest equivalent was the expanded child tax credit in 2021. Despite reducing child poverty, the expanded credit was not made permanent, and its future is set to be debated in Congress again.
The OpenResearch study provides valuable insights for policymakers. It shows that while guaranteed income can have significant effects, its design and implementation need to be carefully considered to achieve the desired outcomes for different groups of people.
