Equity, Diversity and Inclusion

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

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
Have you read?

“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.

Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Stay up to date:

Inequality

Related topics:
Equity, Diversity and InclusionEconomic GrowthEducation and Skills
Share:
The Big Picture
Explore and monitor how Inequality is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

Why should businesses design  goods for better accessibility to people with disabilities?

Uma Girkar

November 11, 2024

Humanitarian crises are growing. So how do we make crisis response more efficient?

About us

Engage with us

  • Sign in
  • Partner with us
  • Become a member
  • Sign up for our press releases
  • Subscribe to our newsletters
  • Contact us

Quick links

Language editions

Privacy Policy & Terms of Service

Sitemap

© 2024 World Economic Forum