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How Finland's Exciting Basic Income Experiment Will Work -- And What We Can Learn From It


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More detailed writeup than normal about Finland's upcoming experiment -- emphasis on EXPERIMENT -- with basic income. It will only affect 100K Finns, and some of the money might be dependent on "work", e.g. volunteering.

Cool experiment! Finnish government is interested for three reasons:

First, increasing numbers of Finns are working part-time, or on a temporary or freelance basis. These people don't qualify for work-based benefits and, because they're working, they don't get unemployment benefits either. They're caught in the middle. "One thing is to make our social security more responsive to those changes in the labor market," says Kangas, who is also the research director at the Finnish Social Insurance Institution (KELA).

Second, the government wants to remove disincentives to working. Some unemployed Finns may not take jobs because they can get more money from the public purse. The hope with a basic income—which is paid irrespective of working status—is that people will want to make more money on top of their government allowance, rather than not working at all. "We want to avoid these incentive traps and make taking jobs more attractive than in the present system," Kangas says.

And three, the government wants to reduce bureaucracy. "When you have income-tested benefits, like housing allowances, it takes time for our employees to check all the applications and see that the client's income is this-and-that, and that their rent is this-and-that. Then, if a person's income is changes, they have to repeat the process again. If the government can pay benefits without that kind of testing, it avoids bureaucratic hassle," Kangas says.

Contrary to some reports, Finland is not giving money to everyone just yet. It's planning an experiment to see what effect a basic income might have. Kangas's team will identify a sample of working age people (17 to 65 years) and then, after two years, compare that group with a control sample. Among the research questions: How much do people on basic income want to work? What is their level of well-being and happiness? And, how much do they use public services, like clinics and hospitals?

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