Finland's basic income trial boosted well-being, but not employment

10 February, 2019, 22:13 | Author: Wade Massey
  • A Kela office in Finland

The Finnish government's Social Insurance Institute (Kela) published mixed results Friday in its bid to find simpler alternatives to the Nordic nation's social security model that now includes sanctions on beneficiaries who turn down work.

The centre-right government that put the policy into place had hoped that within a year, a significantly number of the recipients would be employed compared to a control group that did not receive the income. "This is what I call the Nordic welfare model 2.0", he added.

The basic income has been controversial, however, with leaders of the main Finnish political parties keen to streamline the benefits system but wary of offering "money for nothing", especially ahead of parliamentary elections due in April.

The higher taxes that the Organization for Economic Co-operation and Development (OECD) says would be needed to pay for basic income schemes might also be off-putting for voters. Final conclusions from the Experiment could however not be drawn, since not all the data have been evaluated.

"The basic income recipients of the test group reported better wellbeing in every way in comparison with the comparison group", the trial's chief researcher Olli Kangas said.

He said the end of the two-year trial, during which he published two books, had made it hard again for him to accept commissions, because "I. can earn only 300 euros per month without losing any benefits".

Finland's basic income probe did not increase the employment level of the recipients during 2017, the first year of a two-year test, initial results showed on Friday.

"The recipients of a basic income were no better or worse than the control group at finding employment in the open labour market", Ohto Kanninen, research coordinator at the Labour Institute for Economic Research, said in a statement.

The proportion that had had earnings or income from self-employment was approximately one percentage point higher for the recipients of a basic income than for the control group (43.70% and 42.85%).

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Fifty-five percent of basic income participants and 46 percent of the control group surveyed at the end of previous year perceived their health as good or very good.

The BBC recently reported on the results of Finland's new basic income program.

Participants were generally positive, however, with Tuomas Muraja, a 45-year-old journalist and author, saying the basic income had allowed him to concentrate on writing instead of filling out forms or attending jobseekers' courses.

"They were also more confident in their future and in their ability to influence societal issues", she added.

Universal basic income (UBI) has become a hot topic in many Western developed nations, where it appears that automation and advancements in AI might gradually increase unemployment to potentially risky levels. In addition, they felt that there is less bureaucracy involved when claiming social security benefits and they were more often than the control group of the opinion that a basic income makes it easier to accept a job offer or set up a business.

As part of a nationwide trial, 2,000 randomly-selected unemployed people were given €560 a month to live on for two years.

The data shows that the people who were selected to participate in the trial worked on average only a half-a-day more than people in the control group.

The experiment was begun on 1 January 2017 and ended on 31 December 2018.

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