No new jobs but happier citizens in Finland's basic income test


"The basic income experiment did not increase the employment of participants during the first trial year", Kela, the government agency in charge of benefits, and the Ministry of Social Affairs and Health said in a statement.

Finland - the world's happiest country past year, according to the United Nations - is exploring alternatives to its social security model. That could help reduce dependence on the state and cut welfare costs, especially as greater automation sees humans replaced in the workforce.

The Social Insurance Institution of Finland, or Kela, said "it was not yet possible to draw any firm conclusions" from the first half of the experiment, where about 2,000 randomly selected, unemployed people aged 25-58 got tax-free income of 560 euros ($636) a month with no questions asked.

"The basic income recipients of the test group reported better wellbeing in every way in comparison with the comparison group", chief researcher Olli Kangas said.

Universal basic income (UBI) has become a hot topic in many Western developed nations, where it appears that automation and advancements in AI might gradually increase unemployment to potentially unsafe levels. "I think the effect was a lot psychological", the former IT consultant told Reuters. So far, the only other large-scale experiment in a wealthy Western nation that could have rivaled it took place in the Canadian province of Ontario; participants were recruited by April 2018 - but after a change of government, the trial is being wound down prematurely.

"You kind of got this idea you have two years, you have the security of 560 euros per month".

However, those in support of the trial said basic income can empower people to start new businesses, knowing that they would continue to receive monthly income no matter how well their new venture does.

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Intuitively, however, it seems right that people who feel secure about even a small income display more optimism and report they're functioning better. It can also encourage people to try a new job without the fear of losing their unemployment checks or having to go through the paperwork of reapplying for benefits.

Preliminary results of the basic income experiment showed that while self-perceived wellbeing improved, during the first year, there were no effects on employment. Prime Minister Juha Sipila said in December that he saw it as a means of simplifying Finland's "screamingly complex" social security system.

Proponents of universal basic income were quick to point out the positive well-being and stress statistics coming out of the Finnish experiment, while glossing over the unemployment part of the equation.

Ministers have faced repeated criticism over the government's flagship Universal Credit scheme, which combines six previous main benefits into one payment.

But a hoped-for stiumulus to levels of employment has not yet materialised, the project's researchers said. The Organisation for Economic Co-operation and Development has warned that basic income schemes would need to be paid for with higher taxes.

"The recipients of a basic income had less stress symptoms as well as less difficulties to concentrate and less health problems than the control group".