Basic income trial in Finland boosts wellbeing rather than employment Basic income trial in Finland boosts wellbeing rather than employment

Basic income trial in Finland boosts wellbeing rather than employment
12 Feb 2019

Finland’s experiment with basic income may not have seen employment rise among those participating in a two-year trial, but it has boosted individual wellbeing, according to an interim report.

The trial, which ended a month ago, consisted of a random sample of 2,000 unemployed people aged between 25 and 58. They became the first Europeans to be paid a monthly no-strings income of E560 (US$633), which did not require them to seek or accept work and was not cut if they found a job. Any recipient who took up a new position continued receiving the same amount.

The aim was to understand whether providing a guaranteed income might encourage people to take up low-paid or temporary employment by removing their concerns over losing benefits.

The basic income is below current unemployment benefit levels, which amount to nearly E1,000 (US$1,129) per month but are taxed at a rate of 30%. The basic income is tax-free but is barely enough to live on for someone paying rent so as to keep the pressure on recipients to join the workforce, according to the Telegraph

After evaluating the trial’s initial results, Finland’s Minister of Health and Social Affairs, Pirkko Mattila, said that the impact of the monthly payment on employment “seems to have been minor on the grounds of the first trial year”. But participants were happier and healthier than the control group, reported the New York Times. 

The trial’s chief economist Ohto Kanniainen said the low impact on worklessness was not surprising as many of the country’s unemployed had few skills or struggled with difficult life situation or health concerns.

Finland’s centre right government’s original plan was to expand the scheme after two years as part of its bid to combat unemployment, which has been persistently high for years. But it changed tack last April and imposed benefits sanctions on unemployed people who refused to work instead.

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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Finland’s experiment with basic income may not have seen employment rise among those participating in a two-year trial, but it has boosted individual wellbeing, according to an interim report.

The trial, which ended a month ago, consisted of a random sample of 2,000 unemployed people aged between 25 and 58. They became the first Europeans to be paid a monthly no-strings income of E560 (US$633), which did not require them to seek or accept work and was not cut if they found a job. Any recipient who took up a new position continued receiving the same amount.

The aim was to understand whether providing a guaranteed income might encourage people to take up low-paid or temporary employment by removing their concerns over losing benefits.

The basic income is below current unemployment benefit levels, which amount to nearly E1,000 (US$1,129) per month but are taxed at a rate of 30%. The basic income is tax-free but is barely enough to live on for someone paying rent so as to keep the pressure on recipients to join the workforce, according to the Telegraph

After evaluating the trial’s initial results, Finland’s Minister of Health and Social Affairs, Pirkko Mattila, said that the impact of the monthly payment on employment “seems to have been minor on the grounds of the first trial year”. But participants were happier and healthier than the control group, reported the New York Times. 

The trial’s chief economist Ohto Kanniainen said the low impact on worklessness was not surprising as many of the country’s unemployed had few skills or struggled with difficult life situation or health concerns.

Finland’s centre right government’s original plan was to expand the scheme after two years as part of its bid to combat unemployment, which has been persistently high for years. But it changed tack last April and imposed benefits sanctions on unemployed people who refused to work instead.

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

OTHER STORIES THAT MAY INTEREST YOU

Finland to Introduce National Incomes Register

Finland scraps Universal Basic Income experiment

Publishing wage data could close Finnish gender pay gap, claims report

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