Basic income experiment

A basic income experiment was conducted in Finland in 2017–2018. During the experiment, a total of 2,000 unemployed persons between 25 and 58 years of age received a monthly payment of €560, unconditionally and without means testing.

Results of the basic income experiment: small employment effects, better perceived economic security and mental wellbeing

The evaluation study oh the basic income experiment is now available. The register data on employment now cover both years of the experiment and a more thorough analysis has been made of the results of the survey. In addition, the interview-based survey of basic income recipients complements the overall picture.

The employment effects of the basic income experiment were measured for the period from November 2017 to October 2018. The employment rate for basic income recipients improved slightly more during this period than for the control group. However, the interpretation of the effects of the experiment is made more complicated by the introduction of the activation model at the beginning of 2018, which meant more stringent entitlement criteria for unemployment benefits asymmetrically in both groups. 

During the first year of the experiment, when the activation model had not yet been introduced, the basic income did not have any employment effects for the basic income recipients at group level. All in all, the employment effects were small.

The effects of the basic income experiment on wellbeing were studied through a survey. Survey respondents who received a basic income described their wellbeing more positively than respondents in the control group. They were more satisfied with their lives and experienced less mental strain, depression, sadness and loneliness. They also had a more positive perception of their cognitive abilities, i.e. memory, learning and ability to concentrate.  In addition, the respondents who received a basic income had a more positive perception of their income and economic wellbeing than the control group.

A total of 81 basic income recipients were also interviewed for the study. The interviews highlight the diverse effects of the experiment and the differences in the starting points and life situations of the basic income recipients.

 

Preliminary results: perception of improved wellbeing, during the first year no effects on employment

The first, preliminary results on the basic income experiment evaluation study were published on 8 February 2019.

The basic income experiment did not increase the employment level of the participants in the first year of the experiment. Based on an analysis of register data, recipients of a basic income were no better or worse than the control group in finding employment during the first year of the experiment . The register data are ready with a one year delay, which means that the results for the second year of the experiment will be published at the beginning of 2020.

The survey found that the recipients of a basic income perceived their wellbeing at the end of the experiment as being better than the control group. Recipients had fewer stress symptoms, fewer difficulties concentrating and fewer health problems than the control group. They were also more confident in their future and in their ability to influence societal issues.

The first results are to some extent preliminary, and it is not yet possible to draw any firm conclusions of the effects of the basic income experiment. Results will be published in a series of articles during 2019 and 2020.

Evaluation study of the basic income experiment

The analysis included both a register-based study and a phone survey among members of the experiment group and the control group. Results for the entire experiment became available in spring 2020. A research report on the first year of the experiment was completed in spring 2019.

The main goal was to help understand how receiving a basic income affects the income and employment status of the participants. The impact of the basic income on the participants’ general well-being was also investigated. 

Kela was responsible for the organisation of the research as a whole and conducted the research in cooperation with the VATT Institute for Economic Research and other cooperation partners.

The studying of the effects of the basic income experiment continues in cooperation between Kela’s Research Unit and the VATT Institute for Economic Research. The continued research projects concern the target population’s employment status, use of employment services, income, use of social security benefits and health. The research focuses on research variables that have not previously been reported, such as health and use of healthcare services as well as the long-term effects of the experiment. 

The research materials of the continued projects are mainly based on administrative registers. 

A two-year experiment

The Government of Prime Minister Juha Sipilä trialled a guaranteed basic income in Finland during 2017 and 2018. A working group of researchers from a range of organisations under the project leadership of Kela explored ways in which to carry out the basic income experiment. Legislation was enacted concerning the experiment, and Kela was responsible for the practical implementation of the experiment and for the payment of the basic income. Kela is also responsible for carrying out an evaluation study on the results of the experiment. 

The basic income experiment was launched on 1 January 2017. The experiment ran for two years and ended on 31 December 2018.

The purpose of the basic income experiment was to find ways to reshape the social security system in response to changes in the labour market. The experiment also explored how to make the system more empowering and more effective in terms of providing incentives for work. Further objectives included the reduction of bureaucracy and the streamlining the complicated system for providing welfare benefits.

Publications

Blog posts

Presentation materials

Articles published in Sosiaalivakuutus

Contact information

Olli Kangas, Head of the Research Team, Professor, University of Turku, tel. +358 45 138 3790, firstname.lastname@utu.fi

Minna Ylikännö, Senior Researcher, Kela, tel. +358 50 313 8712, firstname.lastname@kela.fi

Signe Jauhiainen, Senior Researcher, Kela, tel. +358 50 3313 982, firstname.lastname@kela.fi

Miska Simanainen, Reseacher, Kela, tel. +358 50 552 2095, firstname.lastname@kela.fi

Katja Mäkkylä, Researcher, Kela, tel. +358 50 566 8380, firstname.lastname@kela.fi

Markus Kanerva, Managing Director, Tänk (international basic income trials),
tel. +358 40 845 1881, firstname.lastname@vnk.fi

Kari Hämäläinen, Research Director, VATT Institute for Economic Research (register studies), tel. +358 40 304 5518, firstname.lastname@vatt.fi

Milla Ikonen, Communications Specialist, Kela, tel. +358 50 305 7861, firstname.lastname@kela.fi

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