- YCR is working on the Basic Income Project
- Basic income is unconditional cash payments to individuals for economic security
- YCR got interested in basic income through their project OpenAI and the potential impact of automation on the work environment
- Basic income has gained interest internationally, with pilots and studies happening in various countries
- YCR is planning a pilot study to test logistics and survey methods, as well as a larger study
- The study aims to explore the holistic effects of basic income on individuals' lives, including health, well-being, and time use
- Data will be collected through administrative data, surveys, and interviews
- The amount of money given to participants is still being discussed, but around $1,000 a month is being considered
- There will be an income cap for eligibility in the study.

- The study is focusing on basic income, which is a universal benefit that may be taxed once a certain income level is reached.
- The study is capping the basic income at the area median income to avoid underestimating the effect on individuals who already have high incomes.
- The study is targeting individuals between the ages of 21 and 40, and the selection process will be random to ensure an unbiased sample.
- Participants will be given a reloadable debit card to track their financial transactions, and there is also consideration for collecting broader financial data through a web application.
- Basic income differs from welfare in that it is a universal right and aims to provide a minimum level of income for everyone, regardless of economic status.
- The best case scenario for basic income includes providing people with cash to meet their specific needs and potentially leading to broader social safety net expansions.
- The market's reaction to basic income depends on where the money comes from, and economists have different opinions on how it may affect prices and inflation.
- The study is a first step in understanding the impact of basic income, but it won't be able to definitively answer whether it is a good idea.

- The speaker believes that basic income is a necessary solution to economic insecurity.
- They emphasize the importance of starting research on basic income now.
- The organization is hiring a research manager for a study on basic income.
- They recommend searching for basic income resources online and mention the Basic Income Studies journal.
- The organization will share more information about their research design in the future.
- The speaker would save a basic income for the future, while the study will explore how people would spend it over a multi-year period.

- YCR is working on the Basic Income Project, which involves unconditional cash payments to individuals for economic security.
- The project was inspired by OpenAI's research on automation's impact on the work environment.
- Basic income has gained international interest, with pilots and studies taking place in various countries.
- YCR is planning a pilot study to test logistics and survey methods, as well as a larger study to explore the holistic effects of basic income on individuals' lives.
- Data will be collected through administrative data, surveys, and interviews.
- The study is considering providing around $1,000 a month to participants, with an income cap for eligibility.
- The study is focusing on basic income as a universal benefit that may be taxed once a certain income level is reached.
- The study aims to avoid underestimating the effect on individuals with high incomes by capping the basic income at the area median income.
- Participants will be randomly selected and given a reloadable debit card to track their financial transactions.
- Basic income differs from welfare and aims to provide a minimum level of income for everyone.
- The market's reaction to basic income depends on its funding source, and economists have different opinions on its impact on prices and inflation.
- The study is a first step in understanding the impact of basic income, but it cannot definitively answer whether it is a good idea.
- The speaker believes basic income is a necessary solution to economic insecurity and encourages further research on the topic.
- The organization is hiring a research manager for the study and recommends exploring basic income resources online, including the Basic Income Studies journal.
- More information about the research design will be shared in the future.
- The speaker personally would save a basic income for the future, while the study will examine how people would spend it over a multi-year period.

Elizabeth Rhodes and Matt Krisiloff work at Y Combinator Research - https://ycr.org

They're closing in on a final design for their basic income study. They'll be providing people with a stipend each month and studying what happens.

Craig met up with Elizabeth and Matt to discuss the ideas behind basic income and YCR's upcoming study.

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0:10 - Matt and Elizabeth's intro.

0:37 - What is basic income?

0:51 - Why is YCR working on basic income?

2:12 - Who else is studying basic income?

2:49 - Basic income's history in the US.

4:05 - Basic income's history internationally.

4:39 - Status of YCR's basic income study.

5:37 - What is YCR hoping to learn from the study?

6:57 - How will YCR measure the effects of basic income?

8:34 - How much money will people get?

9:42 - How are they choosing people for the study?

11:28 - How are they logging the spending of people who participate?

12:25 - How does basic income differ from welfare?

13:48 - What are the best case scenarios for basic income outcomes?

16:02 - How might the market react to basic income?

17:30 - What are the arguments against basic income?

20:29 - YCR is hiring a basic income research manager - https://jobs.lever.co/ycr/2f74d9d7-0292-4a60-ae83-4602ad1d0daa

21:38 - Where can you learn more about basic income?

22:17 - If Elizabeth and Matt had a basic income, what would they spend it on?

Hey guys, today we have Matt Krisloff and Elizabeth Rhodes from YCR.

They're working on the Basic Income Project.

So before we get started, could you guys give a brief intro?

I've been working on YC research for about a year now.

Prior to that, I was working at YC on Y Combinator Fellowship and prior to that I was working on a mental health startup.

And I'm Elizabeth Rhodes and I'm Research Director for the Basic Income Study.

Before that I was finishing up my PhD in Michigan.

Basically, basic income is unconditional cash payments to individuals to provide a minimum level of economic security.

Yeah, it actually was really influenced out of our first project, OpenAI.

So OpenAI started probably about a year and a half ago at this point, and really is based off the idea of trying to develop general artificial intelligence, something that can really think like a human can.

And I was working on that in the early days of it and talking about it with the team and Sam about where that type of stuff could go.

And we really started thinking that if something like this really exists, it will really change how the traditional work environment works for most people.

And even far beyond, before having something like that, like general artificial intelligence will have cases where people face more and more automation over time.

And it's important to have a robust safety net, to react to those types of changes in a work environment.

So we really started thinking about ideas for what we could be doing around that.

And basic income was a pretty appealing idea because it was a really rare idea that has both left-leaning people and right-leaning people both interested in the same idea.

The only significant example of that that I think of is earned income tax credit where there's similarity that's really considered now.

So it was something that really hadn't been studied significantly in the US context since the 1970s.

was something we thought we should dig into more and made a lot

And are there other studies going on right now internationally or in the US at all?

Yeah, there are a number of other studies.

Basic income sort of had a resurgence, I guess, in the past year.

And so the Finnish government is starting a study.

GiveDirectly is doing a longer term basic income study in Kenya.

The Canadian government is looking into starting 1.

The Netherlands, even Scotland, some cities are looking into doing it.

So pilots are kind of springing up all over the place.

But the idea in the US isn't actually that new.

It almost became a policy, a form of it, more of the negative income tax model, almost became policy under Richard Nixon.

And so there were a number of experiments back in the 70s in the US and Canada testing versions of this and it sort of disappeared.

There was a bit of a work disincentive effect.

It wasn't nearly as large as, like in studies sort of retrospectively looking over the data, It wasn't as large as people say.

It's not like there were people dropping out of the labor force.

It generally was people working fewer hours and maybe, especially women, maybe spending less time at work and more time at home.

But really, it sort of just disappeared really quickly off the national agenda.

That reason and also there were a couple of social implications.

So the divorce rates went up, although not as much as, not as much in retrospect.

See, The data was analyzed and released pretty early before they, in retrospect.

However, when it turns out, when people dive into that a little bit more, it was people able to leave abusive relationships and it wasn't such a negative thing, but back in the 70s and the late 60s, it had enormous social implications that people were not comfortable with.

And has it been experimented with internationally before this, or is it just like right now they're jumping in?

There have been, so in India, in developing contexts, There have been several really good studies in the past couple of years.

India has done several pilots, Namibia, but not in the developed context since the 70s.

Canada was 1 of, you know, back when the US was doing those studies.

But the Netherlands, and people are sort of starting up now.

We don't have new data yet, but they're, you know, starting to.

And so what is the YCR study looking like at this point?

So we are planning, we're doing sort of 2 things.

We're working on a pilot to be able to test all of our logistics and our survey methods, our recruitment, all those types of things.

So we're working on that and doing that while simultaneously devising the research plan for the larger study.

We have, in the past couple months, we've brought together a group of 24 leading academics and policy people from different fields for a working group to discuss the study and how we can design it.

And we've been, we put together a proposal, we've been reaching out to experts, we've been going through the institutional review board for research with human subjects to make sure that we you know are meeting all the ethical requirements and You know protecting our participants So we've really been working on the design.

Okay, and so given that these studies have happened in the past, but not a lot in the first world, what are you guys hoping to learn from it?

So I think in the past, most of the studies, especially in the developed context, less so in the developing world, have focused more on labor force participation.

But as Matt talked about, whether people, like jobs are disappearing, income is more volatile already, and so if people spend a few, couple fewer hours at work, then maybe that's not the most important outcome.

And that's not really our, that's not what's driving this.

We're looking at a much more holistic picture of the effects.

So how it individuals, it's very much of an individual level study.

If you give individuals unconditional cash, how do they respond and how does it affect multiple dimensions of their lives?

So everything from health and mental health, subjective well-being, financial health, time use.

If they work fewer hours, then do they spend more time with family or do they volunteer?

There's any number of ways that people could spend their time and many of them would be very productive for both themselves and society.

So productive use of time doesn't necessarily mean formal employment.

And so, really trying to document more of those holistic, you know, social, how it affects our social connections and their social networks and things like that.

And how is all of that quantified for the study?

So we're using a mixture of administrative data, which is data collected by the governments or credit bureaus or anything like that, with participants' permission.

We'll be able to get as much data passively as we can so that we don't have to bother people And it's a reliable source of data.

Like what data would you be collecting passively?

So financial information, program participation in the government earnings, those types of things, tax information.

But then 1 of the main forms of data from our side of it is surveys and interviews.

So we'll be doing probably every other month, we're still working on the details, surveys, web-based surveys to get at a number of outcomes that we're looking at, just checking in with people, collecting repeated measurements of some of the outcome variables.

But also, we're gonna have a really robust qualitative aspect to the study.

So we wanna know, I think, possibly maybe 200 of the individuals, like a random subset, will interview more frequently and open-ended interviews during the study to really try to get at what is going on.

Not just that this outcome is associated or correlates with this, but like, you know, how is this really affecting people's lives and like what kinds of different constraints and opportunities are they're facing?

And you know, if there are challenges, how could we improve it?

Like how could if it were to become policy, you know, what are ways to structure it to have a chance of being the most successful.

And then like how will you decide how much money people get?

We have looked at, you know, We're looking right now at about $1,000 a month, which the poverty line currently for an individual is about 12,067 or something like that.

So we want to give enough money to provide some level of security.

In a lot of places you can live pretty comfortably.

But part of what this enables people to do is to move.

So once they have that security, how do they, they could move someplace else.

But we wanna provide that enough to sort of be able to feed yourself and provide shelter, but not so much that everyone is living large.

Yeah, in which case I will be part of the study.

I mean, we don't have to get super specific, but like, is there an income range you're going for?

So we are, we will have an income cap for eligibility.

If you know, basic income could, you know, many forms, it's a universal benefit.

And it, you know, might be taxed out eventually once you reach a certain income level.

But for our purposes, we are capping it at the area median income, which varies based on location.

Partly because, I mean it does go fairly to the median income, but the marginal effect of that extra income is expected to diminish as your income goes way out.

So if you are making a ton of money, an extra $1,000 a month, might not make a huge difference.

And that would sort of, if we include people like that in our sample, then the effect would be, we would probably underestimate the effect of a basic income because you'd capture a lot of people for whom the effect wouldn't be very large.

And what about the age of the people participating?

So we are currently looking at ages 21 to 40, which partly because we don't want to get up in, you know, Social Security is a sort of a form of basic income.

So we want to, you know, and we have to narrow it, you know, in some ways.

But anyone, you know, whose household income doesn't exceed the area median, who's between 21 and 40 is eligible.

And people will be selected, people will be applying.

We're looking at a couple different sampling methods, but yes, not recruitment, we're trying to get an unbiased sample.

And so as far as the financial tracking that you mentioned before, how are you going about doing that?

Yeah, so we're actually giving all of the participants a green.gobanker card, which is like a reloadable debit card that we'll be adding money onto throughout the study.

And we'll be able to see in an anonymized way their transactions from that.

1 other thing we're exploring doing through our pilot right now is actually collecting a broader sense of financial data that people are having with other bank accounts.

So we've actually built a web application where people can link their different bank accounts and in An anonymized way report to us what they have been spending on We we haven't decided definitively yet if we're gonna do that for the final study because it could feel a little too invasive But yeah, we're testing it with the pilot right now to see if it makes sense

And I should say that everyone we would not be getting any financial data unless individuals consent to doing so.

And we wouldn't see exact expenditures, it would just be sort of transaction level data.

People often compare basic income to like a welfare type thing.

How does basic income differ from welfare?

So in the sort of the purest form, basic income is more of a like a human right.

It's like some people will call it a citizen's dividend.

So by virtue of living here with all the resources, It's the idea that everyone deserves this minimum level of income, regardless of your economic status.

Everyone gets it, or everyone is eligible to receive it.

And so it works by, you know, if it say brings everyone up above the poverty line, it establishes sort of a minimum level of economic security.

So in that way, it can be welfare, but it's not the very targeted kind of assistance that we give now.

And people often talk about welfare now, but with welfare reform and a number of things, there's very little cash that's actually given out anymore.

There's so much as in-kind benefits that only eligibility is limited to a certain category of people.

So, you know, it's very patchwork and there are a lot of people that are just categorically ineligible.

And so this is, it could achieve the ends of welfare, but it's not, that's not all of what it is, I guess.

And so then what are the best case scenario hypotheses of if basic income works out, what will be unlocked for the U.S.

I personally think it's a whole spectrum of potential outcomes.

I think people like to jump to the end point when it's like universal basic income, perhaps the robots have taken away the jobs and everyone now has this income they can live off passively in some type of utopia.

That might be a scenario that could happen down the line, maybe 30, 40, 50 years from now, but I think there's a lot of really interesting things to consider in the meantime around the idea of basic income as well.

I mean, I think most immediately with our study, 1 of the best things we could show if it turns out well Is that giving people?

Cash unconditionally wouldn't be responsible irresponsible if you do just give people some cash They're not gonna waste it on things like they'll use it responsibly We don't know for sure that that would be the outcome, but I'm reasonably optimistic that would be the case.

And my hope is, even seeing things like that in the shorter term sense, we'll start to have jumping points where Maybe we can have social safety net expansions that are just cash.

Maybe there'll be more appetite for making a broader consensus of what a food stamp is beyond just limited to food.

Maybe it can be open to other types of things as well.

So I think there's really interesting learnings around unconditional cash that'll be more immediate and it'll trend towards a more meaningful basic income over time if it continues to be promising.

I think just 1 of the arguments for basic income is that it gives people both the freedom, but also the ability to meet their own specific needs.

So you hear of a lot of people who are selling food stamps to pay rent, especially here in the Bay Area.

And allowing people, giving them sort of this base level to meet their needs and providing that security where you know every month that you're gonna have this income, how, you know, what that could do to change people's lives and the investments that they make and sort of long-term trajectories, how that could change, I think is, you know, very interesting but can also be really have a lot of, like, long-term impact on policy.

And so 1 question that I know you guys might not have an answer to, but there are several hypotheses around, is how the market reacts to a basic income.

Could you just share what people are thinking right now, maybe possible outcomes?

Well, I think it depends on where the money comes from, right?

So I mean, the argument of how prices change depends on is it recirculated from other, from higher income individuals?

I mean, like, there isn't, I would say I've heard economists tell very different stories about how this would affect.

And it somewhat depends on where the money comes from and any number of other things.

I don't think that the argument that all of a sudden you're just going to have this mass inflation, that everyone all of a sudden that basic income is basically worth nothing.

I don't think that is the case and I think a lot of people have modeled that that's not the case.

With the exception of some of the studies in villages in India, there's not been this sort of concentrated level where you can see sort of the macro level changes.

And even then, you might be changing it in a certain village, but then all of the whole area, the producers and the suppliers, not everyone's receiving it.

And so I think, but there are a number of people that are starting to model that and working on modeling, what sort of the macro level effects.

And so hopefully, we'll be able to start seeing a little bit more on that.

So going back to what you said earlier about people arguing for the point against inflation if a basic income were to be in place, what are some of those arguments?

Yeah, I mean, I think a lot of the arguments against basic income revolve around the cost of something like this.

Obviously it's tremendously, tremendously expensive to be giving a significant income supplement to everyone.

This is another area though where I would go back to the idea that there's a huge spectrum of processes between now and an end point of a basic income.

There are a number of factors that are going to be really hard to have an idea of what they look like along the way.

I think like, for example, 1 area where we really think about basic income and why it's relevant, again it's going back to the idea that there could be significantly more automation in the future.

In the future, it's possible if that's the case, economic output would be much higher on the whole in a way that's kind of hard to imagine honestly now.

Like imagine if we have production capabilities that lead to a thousand times increase in the amount of production we can do as a society, then we really start to approach the idea of having true abundance, which I don't know if we totally know what that means like now, but I think the economic relationship of how we interact with 1 another in terms of what we pay for and what we sell becomes somewhat less relevant.

And I think these are ideas that just as we move towards a society that's changing, we'll have to explore little by little.

I don't think this aspect too, and relatedly, like the idea of how people will live meaningful lives if they don't necessarily have traditional work, will have to be explored in a more decentralized way.

I think the aspects of the idea of expanding the safety net, as we're trying to explore here with seeing if basic income is a good idea is something we can do in a more centralized way because that's like a policy type of aspect.

But the idea of how people will be living their lives, how it'll change interactions on a very individual level between people, we don't know.

And I would guess that's gonna play out in a more decentralized way over a long period of time.

I mean, I think it's important to say that, this study is a first step.

We're not gonna be able to answer, is basic income a good idea?

Like we can begin to get at, Unfortunately.

So we can pick some questions, like, you know, sort of firstly, level, how does this affect individuals?

And that we can sort of start this, like research agenda for basic income and be proactive.

I mean, it's some people say, well, this is like a radical idea, but if change continues to progress in the way that everyone predicts and that already we have massive economic insecurity.

And so we need to start thinking about sort of outside the box solutions and start researching them.

I mean, unless we, if we need this data in like 10 or 15 years, we have to start now, really starting to think about that.

of in line with that, you guys are hiring more people, right?

Who's the next person you're bringing on?

So we're looking for a research manager to help with sort of all operations and implementation, design, sort of be really involved in the study, helping all the different phases.

So we're looking with someone, hopefully, perhaps with some survey experience, because that's going to be a large portion of the data collection, but certainly experience managing large, complex research projects, and interested in the topic and want to work with fun people.

I think for the right person, it's going to be a really, really cool opportunity.

I mean, the study is literally going to be interacting with thousands of people over a multiple year period.

And I just think the interest around this idea of basic income is not gonna go away anytime soon.

So it's really a chance to be on the very edge of where all of this discussion is going.

Cool, and how should they get in touch with you?

So we're having an open application to apply for this position.

It's going to be a pretty tight deadline, just a couple weeks to apply, but yeah, just definitely check out our website.

So just wrapping up, if someone, say, has a job they're happy about and they're not going to apply to work with you guys, but they want to learn more.

If you just sort of Google basic income, there'll be a lot of different groups that, there's even a basic income studies journal that has studies on different pilots and things like that.

And we're gonna be, shortly, once we sort of have a final research design draft, we're gonna be sharing more information about that.

And try to keep people posted and be transparent as we continue with the process.

I guess my last question then is, if you guys had a basic income, what would you spend it on?

Well, I definitely wouldn't quit my job because I love my job.

I would say at this point in my life, I would save it and be prepared for the future and the unknowns that come with that.

I think that's 1 of the really interesting aspects we're actually going to explore with the study is if you take away the need for work, what would you want to do over a multi-year period?

It's not just like a short-term type of thing.

So I think it'll open lots of doors for people to explore how they want to potentially live their lives in different ways.

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Discussing Basic Income with Y Combinator Research