The Report Card on Guaranteed Income Is Still Incomplete

Silicon Valley billionaires and anti-poverty activists don’t have a lot in common, but in recent years they’ve joined forces around a shared enthusiasm: programs that guarantee a basic income.

Tech entrepreneurs like Sam Altman, chief executive of OpenAI, have promoted direct cash transfers to low-income Americans as a way to cushion them from what the entrepreneurs anticipate could be widespread job losses caused by artificial intelligence. Some local politicians and community leaders, concerned about growing wealth inequality, have also put their faith in these stipends, known as unconditional cash or, in their most ambitious form, a universal basic income.

Dozens of small pilot projects testing unconditional cash transfers have popped up in communities around the country, from Alaska to Stockton, Calif. Andrew Yang, an entrepreneur, put the idea of $1,000 monthly payments for all adults at the center of his 2020 presidential campaign. The idea of cash transfers gained broader popularity during the pandemic, as the federal government introduced stimulus checks and child tax credits, and child poverty declined.

While some pilot projects have shown encouraging results, they have been small scale. That changed this summer, when a research project involving several thousand people, backed by Mr. Altman and called OpenResearch, released findings from what is so far the country’s largest experiment with unconditional cash transfers.

If proponents of unconditional cash hoped the findings of the OpenResearch study would prove its benefits once and for all, their hopes were at least partly dashed. People gained flexibility to spend on basic needs, but the cash didn’t transform their net worth or their mental or physical health. Some researchers and guaranteed income proponents argue that the study shows that cash transfers are only a small piece of the larger puzzle of how to improve the financial well-being of low-income people.

“Cash transfers probably do less to improve people’s lives than the proponents of them thought that they would,” said Sarah Miller, an author of the study and economist at the University of Michigan’s Ross School of Business. “The flip side is that they probably don’t have the harmful effects that detractors were concerned about.”