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Y Combinator, the largest and most prestigious startup accelerator in Silicon Valley, has announced new details of its upcoming experiment to give Americans free money.
YC will select 3,000 people across two states and divide them into two groups. The first group will include 1,000 people who will receive $1,000 a month for up to five years. The second group of 2,000 people – which the study will consider its control group – will receive $50 a month.
The goal is to answer a simple, yet bedeviling question: What happens to people’s quality of life and motivation to work when they receive free money, no strings attached?
YC President Sam Altman announced on the company’s blog in May 2016 that he was interested in answering that question with a study of “universal basic income,” a system of wealth distribution in which every citizen receives a standard salary just for being alive.
Many of Altman’s techie peers have endorsed or expressed interest in UBI as a potential solution to the widespread automation of jobs that economists say the coming decades will bring. Advocates say UBI would ensure that people who lose their jobs (and the income that comes with that work) still get a regular paycheck.
Proponents also say UBI could lift people from poverty and raise the collective standard of living for everyone, generating greater prosperity. Skeptics, meanwhile, argue that UBI will sap people of their motivation to work if they already have money coming in.
There haven’t been any long-term studies to say either way, however. YC’s study will be one of the largest experiments in US history and should provide data never before seen in a developed country. Recently, YC concluded its pilot study in Oakland, California, in which a handful of people received a UBI between $1,000-$2,000. The goal of that experiment was to test the idea’s feasibility in the US.
The new study will test a variety of factors to gauge UBI’s effectiveness, including “individuals’ time use and finances, indicators of mental and physical health, and effects on children and social networks,” the company wrote on its blog. It will look to include roughly 100 people by the end of 2017. The most important outcomes to watch will be whether people keep working and feel engaged in their communities, and whether the math could work out to deliver UBI at all.
YC intends to work with local and state governments to ensure people’s UBI payments don’t conflict with their existing social benefits. “At the study’s conclusion,” the blog post read, “we hope to answer our fundamental questions about basic income, advancing the debate about social spending and the future of work.”
The only other major study to produce robust data on the effects of UBI has been in East Africa, where the charity GiveDirectly has been running a pilot study for the last year. Later this fall, GiveDirectly will launch a much larger experiment involving 6,000 people who will receive some version of basic income for 12 years.
Altman has said he is hopeful about UBI, but doesn’t know for sure if it will end up working for all Americans.
“What’s unclear to me,” he told Business Insider last December, “is will people be net-happier or are we just so dependent on our jobs for meaning and fulfillment?”