Finland’s basic income experiment attracts interest
Nordic Labour Journal, by Carl-Gustav Lindén
Finland’s planned empirical experiment with a universal basic income has attracted a lot of international interest before it has even started. An expert group has now presented its first preliminary report of how some social benefits could be replaced by a universal basic income. It will present a more comprehensive report towards the end of the year.
The idea is to engage thousands of Finns in a controlled social experiment which will run over several years.
“Behind many questions new ones have emerged,” said Professor Olli Kangas when he and his colleague presented the preliminary report at the end of March.
The idea is to engage 10,000 randomly selected people over 18 in the experiment and in control groups. By testing out various levels of basic income – 550-750 euro – the researchers will learn more about the effect this has on employment levels. Will a certain level of economic security be an incentive for people to work more, or will it have the opposite effect? People who start working, studying or find other types of employment will still be allowed to claim the benefit.
17 different models
This is the first time basic income is part of a Finnish government programme, despite the fact that 17 different models have been presented since the early 1980s, according to the preliminary report. There has never been agreement on what a basic income should entail and how to finance it. Experts are also divided because earlier experiments in the USA and Canada in the 1970s and 1980s did not provide clear results which could have formed the basis for political decisions.
And North American societies are so different from the Nordic welfare model that the results were not transferable in any case.
Four places in the Netherlands will also introduce basic income experiments. European Union experts are following the experiments with great interest because they might provide new insight which could be relevant for the whole of the EU.
The purpose of the experiment is to move away from opinions and to establish a scientifically sound basis for political decisions. The government wants to carry out the experiment in 2017 and 2018, and will evaluate the results in 2019. The greatest challenge could be that the effects of a basic income are so long-term that the results will not be measurable after only two or three years, but will only become clear decades later or by the time the next generation has grown up.
The idea is to reduce benefit bureaucracy by introducing a simpler benefit model which stimulates employment. Yet the idea of replacing all types of benefits with one single social provision does not find support in the preliminary report. Instead it looks at different models where some are more complex than others. That also means it becomes more difficult to isolate and measure the effects of the basic income model. There are poverty traps in other parts of social policies as well.
The plans have many critics. One is professor of economy Matti Virén at the University of Turku. He thinks today’s social benefit system has its flaws, but at least the support is handed out based on specific needs like disability, illness, childbirth or studies. The basic income would benefit people who have never even considered working or studying.
A universal basic income is being debated as a way of solving technological unemployment which emerges when processes are being automated, and as a way of compensating for different forms of short time employment.
The most interesting part of the preliminary report is a long debate about how this social experiment should be carried out in order to secure a measurable and scientifically reliable outcome. This is about everything from how people think when they know the basic income will be paid out for a limited amount of time, to how researchers will know whether the experiment has succeeded.
The basic income experiment has been met with interest in Finland too, and recently the state think-tank Sitra organised a hackathon for people who are interested in presenting new ideas for the social provision.