Finland’s experiment with universal basic income (UBI)

Finland has begun a basic income experiment with 2,000 people, randomly selected from unemployed persons aged from 25 to 58 years. They will continue to receive a basic income for two-years regardless of their employment status. This is not a true basic income, which would continue for the life of each participant, but some positive results have already emerged.

Finland has taken the decision to test a basic income for unemployed job seekers from the beginning of 2017. The trial will run for two years. The main goal behind the experiment is to see if the mechanism of a basic income (unconditional financial support paid regularly to customers) will increase the incentive for recipients to take up and stay in employment. ….

Why a basic income? The problems of the Finnish unemployment benefit system are varied. First of all, it is quite bureaucratic when it comes to accommodating part-time employment. Claimants must renew their status and provide information about their earnings to Kela [(Finnish Social Insurance Institution] every four weeks, because these earnings reduce the full unemployment benefit. ….

Under the Finnish experiment, a partial basic income of €560 per month replaces some of the basic social security benefits, including the basic unemployment benefit, the sickness benefit, as well as some parental benefits and rehabilitation benefits. …. If they [participants] find a job, the basic income will still be paid on top of the salary. ….

Even though the experiment has been running since the start of the year, it has already yielded results …. The basic income … gives customers peace of mind and freedom from immediate money concerns, allowing them to focus on finding a job, starting a business, etc. And indeed many have done so, while others have decided to learn a new profession or care for their elderly parents. Some have reported experiencing significantly less stress, too.

Basic income: An answer to social security problems?“, OECD, Social and welfare issues, accessed 28 May 2017.

One Response to “Finland’s experiment with universal basic income (UBI)”

  1. See Wikipedia for more experiments with basic income (caution: nearly all are means-tested, hence not universal, so reward unemployment):

    https://en.wikipedia.org/wiki/Basic_income_pilots