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Finland reports on its basic income experiment

February 8, 2019

Finland's basic income experiment boosted participants' well-being but did not spur them to take on work, according to a "halfway" analysis. The study compares 2,000 unemployed on an assured income with a control group.

Symbolbild Haushaltshilfe
Image: picture-alliance/dpa/K. Remmers

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

The study involves giving 2,000 unemployed people a "basic income," a guaranteed but small monthly income with no strings attached, rather than standard state assistance.

The randomly picked people — aged between 25 and 58 — receive €560 ($635) monthly, unconditionally and without intrusive means-testing. They would continue to receive the income regardless of whether they later found work.

The study is being watched across Europe for lessons on how labor and welfare systems can be rearranged — especially given the prospect of artificial intelligence and robotics advances having potentially vast impacts on the labor market as a whole.

Read more: Why I pity the robot that takes my job

Better well-being, but only 'minor' employment gains

Kela said participants —at the halfway mark in the two-year study — had reported improved well-being, including fewer stress symptoms, fewer health problems and less difficulty in concentrating mentally. This was compared to self-reporting from the control group using Finland's normal system, said the institute.

The basic income recipients "were also more confident in their future and in their ability to influence societal issues," it added.

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Chief researcher Olli Kangas said those on the basic income "reported better well-being in every way."

But in terms of Finland's labor market, the basic income seemed to have generated only "minor" gains in the first trial year, said Finnish Health and Social Affairs Minister Pirkko Mattila.

Proponents and detractors

Proponents assert that a basic income can empower people to start new businesses, giving them a safety net no matter how well their venture does. Detractors say it merely removes pressure to get work.

Others argue that technical advances on the horizon, most notably in machine learning and artificial intelligence, may soon leave societies with little choice but to consider some such scheme.

Juha Sipilä Ministerpräsident Finnlands.
Finnish Prime Minister Juha SipilaImage: Getty Images/AFP/E. Korhonen

The findings of the whole experiment, begun in 2017 and set to run until December this year, are due to be published in 2020.

Finland, with its tradition of innovation, began the project under the center-right coalition government of Prime Minister Juha Sipila, a former entrepreneur.

ipj/msh (Reuters, AP)