What Were The Results Of Fin-land’s Basic Income Experi-ment?
From 1 January 2017 to 31 December 2018, Finland ran the world’s largest and most comprehensive basic income experiment. The purpose of this was simple: to find out what effects, positive and negative, basic income can have on people. The government of the then Prime Minister, Juha Sipilä, decided to run the experiment, with researchers at Helsinki University carrying it out and analysing the results.
How the Experiment Worked
For the experiment, 2,000 randomly chosen people on unemployment benefits from across Finland received tax-free monthly payments of €560. Each participant received the same amount of money every month for the study’s duration, no matter who they were, where they lived or what their background or employment history was. Even if someone actually gained a job at some point during the experiment, they would still receive their monthly €560 payments.
The experiment also looked at a control group of 173,000 people, all of whom were receiv-ing unemployment benefits also. Just like the recipients of the basic income, these peo-ple were all randomly selected from all over the country.
Participation wasn’t optional as the experiment was written into the country’s legislation. If you were chosen, either as a basic income recipient or a control group member, you were legally required to take part and couldn’t opt out.
Employment Status Results
What’s important to point out is that in early 2018, the government introduced a piece of legislation known as the ‘activation model’. This made it harder for people to qualify for unemployment benefits. People in both groups – the basic income and control groups – were affected by the new, more stringent requirements.
Effects on employment from November 2017 to October 2018 were looked at. It was found that recipients of basic income worked an average of 78 days during this time, whereas those in the control group worked 73 days on average.
It should be noted that during 2017, before the activation model was introduced, basic income had a negligible effect on employment. Once it came into effect, those on basic income worked more compared with the control group.
Karl Hämäläinen, who is the Chief Researcher at the VATT Institute for Economic Re-search, concluded that basic income’s overall effects on employment were small. He also affirmed that for some people receiving unemployment benefits, the problem of not get-ting work isn’t down to financial incentives or bureaucracy.
Well-Being Results
Shortly before the experiment ended, a phone survey was carried out. The aim of this was to determine how people’s well-being had been over the last two years.
It was found that of those who responded, those who had received basic income felt bet-ter about their well-being than those in the control group. They reported feeling more sat-isfied about their lives and being more trustful of societal/governmental systems. They had also experienced less loneliness, depression and mental strain when compared with control group respondents.
Finally, those who had received basic income had a more positive attitude towards their finances. They felt better protected and felt their money situations were more easily man-ageable.
Interviews
81 of the basic income recipients took part in interviews. Some reported that being in re-ceipt of basic income had a clear effect on their employment, whereas others said the ef-fect on employment was small. Many reported feeling better about working and more in-dependent. A number of those interviewed mentioned that they were able to participate in communal activities such as volunteering.
Not everyone responded positively, however. Some said that while they received basic income, they felt pressure to find a job and others struggled to cope even with the fixed payments coming in every month.
Helena Blomberg Kroll, a professor at Helsinki University, concluded that basic income didn’t seem to solve major life problems. It did, however, enable some to become more active and spend their time more productively.
Conclusion
Basic income isn’t a perfect solution to the problem of unemployment and low-income living by any means. While there are many potential pros associated with it, there are also some cons that people have come up with.
People feel better about their finances knowing there’s a fixed amount of money coming in every month no matter what. While that security can positively affect people’s wellbe-ing, the core problem of getting people into employment remains.
Those on basic income worked more than people on unemployment benefits, on aver-age. Therefore, providing some sort of basic income to people could be a way of boosting employment. The only downside to this, however, is that basic income recipients worked only five days more than those on unemployment benefits. Some would say this isn’t enough of a difference. Would just five days’ more work per person be enough for anoth-er basic income scheme to be given the go-ahead?