What is basic income?
A basic income policy would guarantee everyone in a defined geographic area a minimum amount of income. This money would be unconditional, and recipients could spend it to meet their particular needs. In the U.S. context, some advocates recommend a basic income roughly equal to the poverty line (about $12,000 for an individual per year).
How is the study designed?
We plan to conduct a randomized controlled trial to examine the effects of basic income at the individual level. We intend to enroll participants distributed across two states. Roughly half will be in the treatment group and receive a basic income of $1,000 per month for three or five years. The other half will be the control group and receive $50 per month. Both groups will receive small monetary incentives to complete surveys. We’ll measure a wide variety of outcomes using surveys and administrative data.
What are you trying to measure?
We will measure the effects of a basic income on a low to lower-middle income individuals. Our primary outcomes are: (1) time use (including work and employment); (2) expenditures, consumption, and financial health; and (3) mental and physical health. We’ll explore several secondary outcomes, including time and risk preferences, social and political attitudes and behavior, effects on children’s educational outcomes, cognitive function, and spillover effects for members of recipients’ household and social network.
Where will the study take place?
The study will take place in regions within two U.S. states. For now, we are not publishing the exact locations of the study to protect future participants’ privacy.
How do you decide who will receive the cash transfers?
We will conduct a randomized controlled trial, which means that individuals will be selected at random from a certain population. We will sample from census tracts in two US states and screen for eligible participants -- individuals between the ages of 21 and 40 whose total household income does not exceed the area median income for their county of residence. We’ll also establish quotas to ensure that the sample is representative across several dimensions, including race and ethnicity, gender, and income.
How much money do recipients get?
There are two groups of participants in the study: the treatment group and the control group. The two groups are identical except that those in the control group will receive $50 a month and those in the treatment group will receive $1,000 a month. Participants will also receive small incentive payments for completing occasional short surveys.
How often are the transfers made?
The basic income transfers are made once a month on a pre-specified date. Participants will receive a full schedule of payments when they are enrolled into the study.
Will participants lose means-tested federal or state benefits?
No. Before launching the study, we are securing waivers to ensure that the basic income payments are not considered when determining eligibility for existing benefits. That will guarantee that participants do not lose any means-tested benefits.
But wait, isn’t basic income supposed to be a replacement for standard means-tested benefits?
Some advocates envision basic income as a replacement for the entire social safety net as we know it, while others view basic income as a supplement to some or all existing programs. We do not want individuals and families to be worse off as a consequence of their participation in the study. Because we do not know how the basic income will affect participants, it would be unethical to cause participants to lose benefits. Such a loss could inflict irreparable long-term harm, particularly in the case of benefits for which they may not be able to re-enroll at the end of the study even if they are eligible (e.g., housing vouchers). We do not view cash as an efficient replacement for Medicaid, and the value of Medicaid to beneficiaries may be far greater than the $1000 per month basic income.
We are seeking waivers and exemptions to ensure that participants maintain eligibility based on their earned income. Waivers will exclude the basic income payments from consideration when determining eligibility for benefits, and we will not begin the study until all waivers are in place.
Although some of the benefits we are seeking to preserve might be replaced by a basic income, there are several reasons why preserving the benefits should not affect the relevance of the study or its ability to inform future policy. First, individuals in households currently receiving SSI/SSDI or other social security benefits are ineligible to participate, as they already receive monthly cash income. Individuals in households with a Section 8 voucher are similarly ineligible, as the value of the benefit is large enough that layering on a basic income would reduce the relevance of the study. Because the percentage of eligible individuals that receive a Section 8 voucher is very low, excluding voucher-holders from the sample should not introduce meaningful selection bias.
Unlike housing assistance, however, most other benefits do not have limited availability. Forcing prospective participants to choose between taking up the basic income payments and continuing to receive other benefits like child care assistance would likely lead to nonrandom participation and introduce the sources of bias that formed the basis for critiques of the negative income tax experiments.
Finally, the narrow eligibility criteria and the low benefit levels associated with other programs mean that many individuals in the sample will either be ineligible for existing benefits or the amount they will continue to receive should not affect the interpretation of the results. We will be adjusting for the preservation of existing benefits in the analyses.
Can I be a study participant?
Unfortunately, no. It is important that participants are randomly selected into the study.
Won’t people just waste the money or quit their jobs?
Current research on unconditional cash transfers suggests that people spend the money wisely. In general, we don’t expect people to quit their jobs since $12,000 per year is not enough for a comfortable lifestyle. However, it’s possible people could spend more time searching for a job matching their skills and interests, quit their job to start their own company, or spend less time in the formal labor market and more time caring for children or an elder. We are also interested in how participants will spend their time; time use is one of our primary outcome measures.
When and why was Y Combinator Research founded?
Y Combinator Research (YCR) was founded in 2015 by Sam Altman, the president of Y Combinator. YC is a startup accelerator that gives new companies advice and funding. Startups have enabled a great deal of innovation, but they are not ideal for addressing work that requires a very long time horizon, doesn’t return a profit, seeks to answer open-ended questions, or develops technology that shouldn’t be owned by any one company. Y Combinator Research was founded as a nonprofit research lab to work on these problems.
The Basic Income Project was announced in January 2016. After an open call for research, Elizabeth Rhodes joined YCR to lead the Basic Income Project. She has a PhD in Social Work and Political Science from the University of Michigan.
Why not do this through a university or more traditional research avenue?
We are committed to conducting a rigorous study and we're partnering with academics and universities. The project has been approved by the Institutional Review Board (IRB) at Stanford University, and the IRB will continually review the study procedures throughout the life of the project. We are attempting a hybrid approach that draws on the strengths of traditional academic research and the operational experiences of the Silicon Valley community in which YCR is embedded. Basic income is a bold idea that more traditional funders and research institutions have been hesitant to invest heavily in. This is the kind of idea and risk that YCR was eager to embrace, and we view this study as a first step that will inform and inspire future studies.
How is the project affiliated with Y Combinator?
This project is being run through Y Combinator Research (YCR), which is a 501(c)(3) nonprofit research lab. YCR was founded by Sam Altman, President of Y Combinator.
Is YCR advocating for a basic income?
No. We are researchers, not advocates. We are concerned by growing economic insecurity and want to explore potential solutions, but we do not know whether basic income is a viable and advisable solution. We believe it is important to consider many options and generate high-quality data to inform the conversation. As such, we are approaching the study as independent, neutral social scientists. We are registering our analysis plan online on the American Economic Association’s RCT Registry, and will make our de-identified data available to researchers at the end of the study.
Who is funding the study?
The study will be funded by Y Combinator Research and donors, including traditional research donors and philanthropists concerned about poverty, inequality, or the future of work. We are still fundraising and will not begin the study until we have secured funding for the entire project.
How do you pay for your operating costs?
Our operational costs are supported by Y Combinator Research and other donors.
How do I apply for a job at YCR?
We post open positions on our website, on our blog, and around the web.
Who else is studying basic income?
A number of other research groups are studying the effects of unconditional cash transfers. You can read more about those efforts here:
Kela Basic Income Study, Finland
Ontario Study, Canada
Income and the Developing Brain During the First Three Years of Life, USA
GiveDirectly, Kenya and Uganda
Netherlands Social Assistance Experiments, The Netherlands
Unconditional Basic Income: Two pilots in Madhya Pradesh, India
How can I follow your progress?
We’ll post about our progress on our blog.
I am a reporter. Can I interview your participants?
To protect participants’ privacy and the integrity of the research, we will not share participants’ identities or connect them with anyone outside of the research team. The study has a significant qualitative component, and researchers will be interviewing a subset of participants frequently in order to understand how receiving the basic income affects their lives and the lives of individuals in their households. We will share these stories when we release our findings.
Still have questions?
You can get in touch via our "Contact" page.