UBI Experiment: Success or Failure? Insights from Sam Altman’s Trial - EP257

Economics Explored

In this episode, Gene Tunny dives into a recent Universal Basic Income (UBI) experiment funded by Sam Altman, CEO of OpenAI. Gene explores the key findings of the randomised controlled trial and discusses whether the positive outcomes are enough to convince sceptics. Are UBI recipients more financially secure, or are there deeper concerns about its impact on labour force participation and long-term wealth? Get Gene’s balanced analysis of this major UBI trial and its broader implications.

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Timestamps for EP257

• Introduction (0:00)
• Defining Universal Basic Income (UBI) (4:21)
• Overview of the OpenAI UBI Experiment (8:09)
• Positive Findings from the OpenAI UBI Experiment (13:54)
• Concerns and Criticisms of the OpenAI UBI Experiment (21:55)
• Financial Impact of UBI on Household Net Worth (22:50)
• Gene Tunny's Skepticism About UBI (34:17)
• Closing Remarks and Previous Episode Clips (37:57)

Takeaways

1. Mixed Outcomes of UBI: The experiment showed some positive effects, such as increased financial flexibility and well-being, but also concerning results, such as a slight decrease in labour market participation.
2. Spending Behavior: UBI recipients spent more on necessities like food and rent; interestingly, they were more likely to help others financially.
3. Limited Educational and Employment Impact: Younger participants showed interest in further education, but there was no significant boost in human capital or labour productivity.
4. Debate Over Financial Impact: UBI did not lead to clear improvements in recipients' financial health. The study found increased debt in some cases, raising questions about UBI's long-term benefits.
5. AI and UBI: As technological advancements continue, UBI is seen by some as a solution to technological unemployment, though Gene and some experts remain sceptical about the scale of potential job loss.

Links relevant to the conversation

Bloomberg article “Sam Altman-Backed Group Completes Largest US Study on Basic Income”:

https://www.bloomberg.com/news/articles/2024-07-22/ubi-study-backed-by-openai-s-sam-altman-bolsters-support-for-basic-income

OpenResearch’s website:

https://www.openresearchlab.org/

Pete Judo’s video on UBI experiment failing:

https://youtu.be/oyoMgGiWgJQ?si=j3T-3yaEL5Rajcpw

NBER working papers on the study

The Employment Effects of a Guaranteed Income: Experimental Evidence from Two U.S. States:

https://www.nber.org/papers/w32719

The Impact of Unconditional Cash Transfers on Consumption and Household Balance Sheets: Experimental Evidence from Two US States:

https://www.nber.org/papers/w32784

Two Computer Scientists Debunk A.I. Hype with Arvind Narayanan and Sayash Kapoor:

https://youtu.be/M3U5UVyGTuQ?si=qcqSflHCf837GisA

AI can do only 5pc of jobs, says MIT economist who fears crash:

https://www.afr.com/world/north-america/ai-can-do-only-5pc-of-jobs-says-mit-economist-who-fears-crash-20241003-p5kfil

Previous episodes:

https://economicsexplored.com/2022/05/03/a-ubi-advocate-on-its-benefits-and-costs-ep137-show-notes-transcript/

https://economicsexplored.com/2022/02/13/ubi-universal-basic-income-w-ben-phillips-anu-ep126/

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