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Finland's basic income findings: More happiness, but no effect on employment

Finland’s basic income trial increased participants’ sense of happiness but didn’t improve employment, the government said on Friday.

Kaksi ihmistä hyppää ilmaan iloisesti rannalla auringonlaskua vasten
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The basic income experiment did not increase participants’ employment levels in the first year (2017) of the two-year experiment. But by the end of the trial, basic income recipients’ perceived wellbeing was better than that of those in the control group.

The randomised field experiment implemented by Finland's benefits agency Kela selected 2,000 unemployed people at random to receive 560 euros tax-free every month. Participants were able to work alongside receiving the money, or even start their own businesses. Selected participants could, however, not opt out of the trial.

"We can say that during the first year of the experiment the recipients of basic income were no better or worse off than the control group at finding employment in the open labour market," said Ohto Kanninen, Research Coordinator at the Labour Institute for Economic Research, in a government statement.

Less bureaucracy, more happiness

People receiving basic income over the past two years said the tax-exempt benefit made it easier to set up a business and that they were pleased with the reduction in red tape.

"The basic income may have a positive effect on the wellbeing of the recipient even though it does not in the short term improve the person’s employment prospects," said Minna Ylikännö, lead researcher at Kela.

Fifty-five percent of basic income participants and 46 percent of the control group surveyed at the end of last year perceived their health as good or very good. Meanwhile 17 percent of basic income recipients and 25 percent of the control group said they experienced quite a high degree or very high degree of stress over the past two years. The response rate for the survey was 23 percent.

The social experiment, launched by prime minister Juha Sipilä’s government, aims to explore how Finland's welfare system could adopt to changes in working life.

The experiment began on 1 January 2017 and ended on 31 December 2018.

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