Finnish citizens given universal basic income report lower stress levels and greater incentive to work
Finland has been giving 2,000 of its citizens an unconditional income for the last five months and some are already seeing the benefits, reporting decreased stress, greater incentives to find work and more time to pursue business ideas.
The scheme is the first of its kind in Europe and sees participants receive €560 (£473) every month for two years.
Recipients do not have to demonstrate that they are seeking employment and they are not required to regularly report to authorities to prove they still need the payment, as is the case with standard unemployment benefits. They can spend the money however they like.
Under the pilot, if a participant finds work, they will continued to receive the stipend, removing one of the limitations of current welfare systems – the disincentive to find work.
The trial is one measure introduced by the centre-right government to tackle Finland’s unemployment problem.
Juha Jarvinen, an unemployed young father in a village near Jurva, western Finland, was picked at random to receive the stipend, starting in January this year. He told the Economist that, unlike when he was receiving standard unemployment payments, he is now actively seeking work.
He had previously been offered a few part-time positions but taking them would make no sense, since it would jeopardise his welfare payments. “It is crazy, so no one will take a bit of work,” he said.
He said he is also in the process of starting a business, is much less stressed and no longer has to go through the “silly show” of filling out forms or attending regular interviews with employment agency officials.
“I’m an artist and entrepreneur. Sometimes I’m too active, I don’t have time to stop,” he said.
Not everyone is impressed by the pilot scheme, however. In February, Finland’s biggest union said the experiment was unaffordable and would encourage some people to work less while driving up wages in undesirable professions.
“We think it takes social policy in the wrong direction,” Ilkka Kaukoranta, chief economist of the Central Organisation of Finnish Trade Unions (SAK), told Bloomberg.
The union, which represents almost 1 million members, or a fifth of the Finnish population, said the model being tasted is, “impossibly expensive, since it would increase the government deficit by about 5 per cent” of gross domestic product.
In March, Ontario, Canada’s largest province, announced it was trialling a similar universal basic income scheme.