Finland’s basic income experiment reports mixed results

The two year experiment gave €560 each month to 2,000 random people in different parts of the country.

File picture of small business and economy / Credit: iStock

The final official report looking into Finland’s basic income experiment concludes that there were some positives and negatives along the way.

The two year basic income experiment was carried out in 2017-2018 and was hailed as the first nationwide, random project of its type in the world. Some 2,000 unemployed people chosen at random were given €560 every month regardless of any other income, or whether they were looking for a job.

Wednesday’s new report finds that people who got the money were generally more satisfied with their lives and experienced less mental strain – however there was little effect on employment levels among the 2,000 recipients.

Specifically, families with children who received the money improved their employment rates across both years of the experiment, however researchers concede it’s difficult to draw any proper conclusions from this because of the small number of people included in the experiment.

“All in all, the employment effects were small. This indicates that for some persons who receive unemployment benefits from Kela the problems related to finding employment are not related to bureaucracy or to financial incentives” says Kari Hämäläinen, Chief Researcher at the Institute for Economic Research VATT.

Improved perceptions of mental and economic wellbeing

Researchers contacted participants in the experiment by phone shortly before it ended, to ask about their perceptions of mental and economic wellbeing.

Those who responded described their wellbeing more positively than respondents in a control group who did not receive the monthly money.

They were more satisfied with their lives and experienced less mental strain, depression, sadness and loneliness.

“In addition, the respondents who received a basic income had a more positive perception of their income and economic wellbeing than the control group. They were more likely to find that their financial situation is manageable and that they are protected financially” explains Minna Ylikännö, from Finland’s Social Insurance Institution Kela.

However, Ylikännö admits that it’s not possible to say with certainty that the better wellbeing of the people who took part in the experiment was because they received the basic income.

Fewer than one-in-three people who received the basic income answered the survey about their perceptions of wellbeing, mental and economic health.

The basic income experiment has been criticised as flawed from the start, as money only went to unemployed people rather than everyone – the intention of a universal basic income scheme – and the number of people who received the money was considered small by many researchers.

Additionally, the experiment was unable to look at the impact of a universal basic income on individual communities when it comes to the economy or job creation, because the 2,000 recipients were chosen at random and scattered across different parts of the country.