Finland’s basic income scheme did not spur its unemployed recipients to work more to supplement their earnings as hoped but it did help their wellbeing, researchers said on Friday as the government announced the trial’s initial findings.
The two-year trial, which ended a month ago, saw 2,000 Finns, chosen randomly from among the unemployed, become the first Europeans to be paid a regular monthly income by the State that was not reduced if they found work.
Finland, which will hold parliamentary elections in April, is exploring alternatives to its current social security model.
The project is being watched closely by other governments who see a basic income as a way of encouraging the unemployed to take up often low-paid or temporary work without fear of losing their benefits. That could help reduce dependence on the State and cut welfare costs, especially as automation sees humans replaced in the workforce.
Finland’s Minister of Health and Social Affairs Pirkko Mattila said the impact on employment of the monthly pay cheque of €560($635) “seems to have been minor on the grounds of the first trial year”.
But those in the trial reported they were happier and healthier than the control group.
“The basic income recipients of the test group reported better wellbeing in every way in comparison with the comparison group,” chief researcher Olli Kangas said.
Sini Marttinen, 36, said that knowing her basic income was guaranteed had given her enough confidence to open a restaurant with two friends during the trial period.
“I think the effect was a lot psychological,” the former IT consultant said. She had been unemployed for nearly a year before “winning the lottery”, as she described the trial.
Overhaul
Italy is due to introduce a “citizens’ wage” in April in a major overhaul of the welfare state, which will offer income support to the unemployed and poor.
One issue with the Finnish pilot is that it did not include any tax claw-back once participants found work and reached a certain income level, which the researchers had said would make the results more realistic. The Organisation for Economic Co-operation and Development has warned that basic income schemes would need to be paid for with higher taxes.
Participants were generally positive. Tuomas Muraja, a 45-year-old journalist, who published two books during the two-year trial period, said, “If people are paid money freely that makes them creative, productive and welfare brings welfare”.
