Finland's Basic Income Pilot

Updated: Jun 12, 2020

First major study of scheme comes as economic toll of coronavirus prompts fresh interest in idea, reports The Guardian.


Europe’s first national, government-backed basic income experiment did not do much to encourage recipients into work but did improve their mental wellbeing, confidence and life satisfaction, according to the first big study of a Finnish scheme that has attracted fresh interest.


“The basic income recipients were more satisfied with their lives and experienced less mental strain than the control group,” the study, by researchers at Helsinki University, concluded. “They also had a more positive perception of their economic welfare.”


The study comes as the economic fallout from the coronavirus crisis sparks renewed interest in basic income schemes. The Pope even suggested in his Easter address that “this may be the time to consider a universal basic wage”.


The Spanish government said last month it aimed to roll out a basic income “as soon as possible” to about a million of the country’s poorest households. Scotland’s first minister, Nicola Sturgeon, said she was now "much more strongly of the view that [universal basic income] is an idea that’s time has come”.


Finland’s two-year scheme, which ran in 2017 and 2018 and attracted widespread international interest, paid 2,000 randomly selected unemployed people across the country a regular monthly income of €560 (£490), with no obligation to seek a job and no reduction in their payment if they accepted one.


Aimed primarily at seeing whether a guaranteed income might encourage people to take up often low-paid or temporary work without fear of losing benefits, the scheme was not strictly speaking a universal basic income trial because the recipients came from a restricted group and the payments were not enough to live on.


But it was watched closely by other governments who see a basic income not only as a way to get more people into some form of work, but also as a route to reducing dependence on the state and cutting welfare costs. The idea has gained traction amid predictions that automation could threaten up to a third of current jobs.


The researchers, who conducted 81 in-depth interviews with participants in the scheme, concluded that while there was significant diversity in their experiences, they were generally more satisfied with their lives and experienced less mental strain, depression, sadness and loneliness than the control group.


The researchers also noted a mild positive effect on employment, particularly in certain categories, such as families with children, adding that participants also tended to score better on other measures of wellbeing, including greater feelings of autonomy, financial security, and confidence in the future.


“Some people said the basic income had zero effect on their productivity, as there were still no jobs in the area they were trained for,” said Prof Helena Blomberg-Kroll, who led the study. “But others said that with the basic income they were prepared to take low-paying jobs they would otherwise have avoided.


“Some said the basic income allowed them to go back to the life they had before they became unemployed, while others said it gave them the power to say no to low-paid insecure jobs, and thus increased their sense of autonomy.”


The scheme also gave some participants “the possibility to try and live their dreams”, Blomberg-Kroll said. “Freelancers and artists and entrepreneurs had more positive views on the effects of the basic income, which some felt had created opportunities for them to start businesses.”


Kroll said the results of the study could support arguments both for and against basic income. “But as we’ve all learned in the early part of 2020, insecurity is not a good way to live,” he said. “While basic income can’t solve all our health and societal problems, there is certainly a discussion to be had that it could be part of the solution in times of economic hardship.”