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2,000 selected for compulsory basic income trial - participants to be notified December 28

Next week Finland’s social benefits administrator will notify 2,000 randomly selected unemployed people of their participation in its basic income experiment. The pilot aims to determine whether a monthly 560-euro payment will encourage recipients to find temporary or part-time work.

Kelan tunnus seinässä.
Image: Ismo Pekkarinen / AOP

The Social Insurance Institution of Finland (Kela), has randomly chosen 2,000 unemployed persons as a sample to take part in a basic income trial. The selected candidates will be informed on December 28, and participation in the pilot is compulsory.

Once the trial begins, basic income recipients will have to give up their basic unemployment allowance or labour market subsidy. The scheme will not affect other benefits.

Officials are hoping that participants in the trial will be motivated to find temporary or part-time work. However they will also be observing other aspects of their behaviour in the job market.

From 2017 through 2019

Those pilot groups will then be compared to other individuals receiving a basic allowance or labour market subsidy. Both are subject to taxes, so the amount that recipients are left with will be equivalent to the 560-euro basic income amount.

In other words, the amount of aid that the chosen 2,000 will receive will stay largely the same unless their circumstances change.

The sample was drawn from a pool about 175,000 individuals from the target population: people aged 25 to 58 who were being paid a labour market subsidy or basic unemployment allowance in November 2016. The sample does not include jobseekers who are still receiving the earnings-related unemployment allowance.

From this group, 2,000 names were chosen to receive 560 euros per month for two years, starting on January 1, 2017.

Those chosen can’t opt out

Kela says participation in the experiment is obligatory, in the hopes of keeping the study population stable for the entire two-year period. The basic income may however be cancelled or terminated if the recipient’s circumstances change.

People receiving home child care allowances, living abroad or carrying out military or civil service are disqualified. New participants will not be selected to replace those whose basic income is interrupted or terminated.

Forty-eight percent of the study group are women. Thirty percent are between 25 and 30 years of age, another thirty between 35 and 44, and 41 percent between 45 and 58.

In those that were chosen for the sample, 87 percent were currently receiving the labour market subsidy and 13 percent basic unemployment allowance.

According to Statistics Finland, the unemployment rate stood at 8.1 percent in November.

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