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

Lester Mason
February 10, 2019

Universal basic income recipients in Finland haven't improved their employment levels, but they have improved their well-being, the first results from the experiment have found.

They were allowed to keep it, even if accepting employment.

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%).

"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.

Minna Ylikanno, a researcher with Kela, said the basic income recipients appeared less stressed, healthier and more confident in the future than a 5,000-member control group of unemployment benefits recipients.

The annual salary income on top of the basic income pay was on average 4,230 euros, while the comparison group people earned 21 euros more.

For a lot of people on the left, UBI focuses too heavily on individuals' personal wealth and buying power - or rather, their lack of it - without doing anything to stop companies wasting resources by producing far more stuff than people need, and over-working their employees in the process.

Kangas is the research director of the test.

In January 2017 the country became the first European country to launch an experiment of its kind, testing the idea of an unconditional basic income.

Social Services Minister Lisa McLeod said about the program that "we have a broken social service system".

Of the major political parties, the conservative National Coalition and the social democratic SDP do not support.

Miska Simanainen, one of the Kela researchers behind the Finnish study, told the BBC that the government carried out the test "to see if it would be a way of reforming the social security system".

"Economists have known for a long time that with unemployed people financial incentives don't work quite the way some people would expect them to", he added.

Her income only rose by 50 euros a month compared to the jobless benefit she had been receiving, "but in an instant you lose the bureaucracy, the reporting", Marttinen said.

Trial 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 form-filling or attending jobseekers' courses.

A higher income would also lead to the loss of public housing subsidies.

The Finnish test was carried out on the basis of a public law enacted for the test. The final results will be completed by 2020.

The researchers have acknowledged that the Finnish pilot was less than realistic because it did not include any tax claw-back once participants found work and reached a certain income level.

Other reports by Iphone Fresh

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