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Finland's basic income trial did not make recipients passive, govt research finds

The basic income group could have avoided employment-promotion measures if they wanted to -- but they didn't.

Sadan euron seteleitä
Image: Jyrki Lyytikkä / Yle

The first trial period of Finland’s basic income experiment did not appear to have any statistical impact on employment, but it also did not seem to prevent recipients from making use of programmes designed to help them find work, according to a new report out by the government's institute for economic research VATT.

In the analysis released on Tuesday, VATT said that by nature, the basic income experiment contained elements that could undermine employment measures and make people passive.

It noted that participants in the programme could, if they wanted, avoid all of the employment-promotion measures offered to them, as well as the responsibilities imposed on jobseekers. The report noted if factors that have a positive impact on employment are removed from the trial, it could reduce the experiment’s employment effect.

The authors noted that the body of international research into basic income particularly emphasises the threat of activation measures, among other factors. One of the most effective means of boosting employment has been found to be personal meetings between participants and employment officials.

Basic income group did not become passive

Removing this element could weaken the employment effect of the trial, if basic income recipients did not participate in employment promotion activities. However authors of the VATT report found that this was not the case.

"In light of these results, the programmes offered by labour force professionals did not appear to be very unpleasant [to participants]. The basic income group participated in them in almost the same way as others, although the unconditional basic income offered them every opportunity to avoid the obligations of seeking employment," said chief researcher Kari Hämäläinen.

A previous analysis of the basic income experiment by the benefits agency Kela found that the no-strings-attached monthly payment of 560 euros did not have any significant impact on getting people into work.

The model was trialled from 2017 to 2018 and involved 2,000 randomly-selected individuals who received the tax-free monthly payment.

"The trial was successfully implemented. The random nature of the selection ensured that we were able to reliably assess it using register data. Hopefully the incoming government will also use randomised experiments to develop the social benefits system," said senior researcher Jouko Verho.

Edit: Updated at 2.20pm on 3 April to correct job titles and to remove reference to VATT as a think tank.

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