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Basic income experiment launched in Finland
The first stage of the Finnish basic income experiment was launched at the turn of the year. The purpose of the two-year experiment is to see if a basic income can help to boost employment.
The experiment is conducted among 2,000 persons between ages 25 and 58, who will receive a monthly basic income of €560 for two years. The participants were selected in December by random sample.
According to Marjukka Turunen, head of Kela's Legal Affairs Unit, the basic income encourages recipients to seek employment, removes disincentives to work, and reduces bureaucracy.
At present, unemployed persons may not gain any additional income even if they find work because earnings reduce social benefits.
For someone receiving a basic income, there are no repercussions if they work a few days or a couple of weeks. Incidental earnings do not reduce the basic income, so working and self-employment are worthwhile no matter what. This is the key idea behind the basic income, Turunen says.
More and more people are working part-time or temporarily or are self-employed. Coordinating social security systems with non-standard work is often challenging. The basic income also helps to reduce bureaucracy as the recipients do not have to report the number of hours they work or to fill in various forms.
According to Turunen, the basic income also helps its recipients plan their finances and provides a sense of security.
She says that as the basic income is paid in advance at the beginning of each month, the recipients can count on having at least that amount of money at their disposal. This is a clear improvement on the current situation where recipients of the labour market subsidy for instance have to claim it afterwards.
First step to modernising the social security system
The basic income experiment launched at the turn of the year should be seen as the first step in a series of experiments testing various basic income solutions.
The research team led by Kela recommends that the sample size be increased in 2018 to include other persons with small incomes. There have also been suggestions that young persons under the age of 25 should be included. Turunen says that Kela is following with great interest the steps which the government will take with respect to the continuation the experiment.