Inequality

The results of Finland’s basic income experiment are in. Is it working?

Spectators cheer and wave Finnish flags during the eighth day of competition at the world athletics championships in Helsinki August 13, 2005. REUTERS/Dylan Martinez  AA/mk - RP6DRMRPVVAA

$600 a month, no strings attached? Sounds like a reason to be celebrating. Image: REUTERS/Dylan Martinez

Emma Charlton
Senior Writer, Forum Agenda
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Inequality

How would you like to get more than $600 a month, no strings attached?

Sound too good to be true?

Not in Finland, where they’re experimenting with giving unemployed people a basic income, with the hope that it would provide a stronger incentive to work than the current, more bureaucratic model.

While the concept of a basic income isn’t new, it’s gained traction in recent years as policy makers grapple with alleviating poverty, growing inequality and the job losses that are likely to go hand-in-hand with automation.

Similar ideas have been advocated by prominent business people including bond investor Bill Gross and Facebook CEO Mark Zuckerberg, and tests have also been carried out in countries including Canada, Uganda and Kenya.

As well as streamlining social security processes, proponents of the idea say it could also cut the health problems associated with poverty, saving money in the longer term.

However, critics say such plans are too costly, not practical, and would disincentivize people to find jobs.

So does it work?

Well, it depends what you’re looking for.

Initial findings from the first of a two-year programme in Finland, where participants were given 560 euros (around $630) per month, showed positive effects on health and stress, but no improvement in work status.

 Data from Finland’s Ministry of Social Affairs and Health
Data from Finland’s Ministry of Social Affairs and Health Image: Feeling better about finance

“There is no statistically significant difference between the groups as regards employment,” researchers including Olli Kangas wrote in the report. “However, the survey results showed significant differences between the groups for different aspects of wellbeing.”

 Data from Finland’s Ministry of Social Affairs and Health
Data from Finland’s Ministry of Social Affairs and Health Image: Feeling better about finance

The individuals who received a basic income were no more likely to find work than those who didn’t, according to results from the first year of the experiment. Finding out why this is and the dynamics at play will form part of a broader investigation that will be published in 2020.

So while the government’s aim to “promote more active participation” and “provide a stronger incentive to work” doesn’t seem to have been met, success can be found in other areas.

 Data from Finland’s Ministry of Social Affairs and Health
Data from Finland’s Ministry of Social Affairs and Health Image: Feeling healthier
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“Those in the test group experienced significantly fewer problems related to health, stress and ability to concentrate than those in the control group,” the researchers wrote. “Those in the test group were also considerably more confident in their own future and their ability to influence societal issues than the control group.”

With improvements seen in those areas in just a year, it’s clear that more investigation is needed before final conclusions can be drawn, with the preliminary results offering something for advocates and critics of basic income alike.

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InequalityEconomic ProgressEducation
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