Finland’s basic income experiment: self-perceived wellbeing improved but no effects on employment

Universal Basic Income is a much talked about idea these days.

Finland did an experimental study in 2017 to find the effect of basic income:

The basic income experiment was launched on 1 January 2017. During the experiment, a total of 2,000 unemployed persons between 25 and 58 years of age received a monthly payment of €560, unconditionally and without means testing. The experiment run for two years until 31.12.2018. 

The purpose of the basic income experiment was to find ways to reshape the social security system in response to changes in the labour market. The experiment also explored how to make the system more empowering and more effective in terms of providing incentives for work. Further objectives included the reduction of bureaucracy and the streamlining the complicated system for providing welfare benefits.

The preliminary results of the experiment have been released:

The effects of the basic income experiment on wellbeing was studied through a survey which was done by phone just before the experiment ended.

According to the survey, the recipients of a basic income perceived their wellbeing as being better than did the control group. 55% of the recipients of a basic income and 46% of the control group perceived their state of health as good or very good. 17% of the recipients of a basic income and 25% of the control group experienced quite a high degree or a very high degree of stress.

‘The recipients of a basic income had less stress symptoms as well as less difficulties to concentrate and less health problems than the control group. They were also more confident in their future and in their ability to influence societal issues’, says Minna Ylikännö, Lead Researcher at Kela.

The recipients of a basic income were also more confident in their possibilities of finding employment. 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.

‘The results of the register analysis and the survey are not contradictory. The basic income may have a positive effect on the wellbeing of the recipient even though it does not in the short term improve the person’s employment prospects’, says Ylikännö.

The response rate for the survey was 23% (31% for the recipients of a basic income and 20% for the control group).

….

The recipients of a basic income had on average 0.5 days more in employment than the control group. The average number of days in employment during the year was 49.64 days for the recipients of a basic income and 49.25 for the control group.

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%). Then again, the amount of earnings and income from self-employment was on average 21 euros lower for the recipients of a basic income than for the control group (€4,230 and €4,251).

Hmm..

Expect fair amount of discussion on this going forward…

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