Finland's Universal Basic Income Trial Elicits Positive Results And Improved Wellbeing

For this Helsinki beggar, a guaranteed minimum income could be the difference between life and death, for others it appears to offer modestly better mental health and employment outcomes than navigating the welfare bureacracy. Aija Lehtonen/Shutterstock

Unemployed people in Finland given a guaranteed monthly income spent more time working than their counterparts who had to be unemployed and seeking work to get welfare, and also experienced better mental health, a much-anticipated study has found.

After decades of neglect, the idea of a Universal Basic Income (UBI) has entered public debate in recent years. Supporters and opponents have both rushed to predict the effects of giving everyone enough money to live on, with payments independent of employment. Despite often-expressed certainty, however, most of this has been guesswork, so those who prefer evidence have been eagerly awaiting results from a trail recently conducted on Finns.

The results have now been published by the Social Insurance Institution of Finland. So far they are only in Finnish, but aware of the worldwide interest the authors provided an English summary and comments. How to interpret them will probably be debated for a long time, but the authors appear to consider them a tentative endorsement of UBI.

However, the Finnish study is not a true test of UBI for two reasons: Instead of giving money to a random sample of the population, or perhaps a representative region, all the beneficiaries were unemployed when the study started. Secondly, participants only received €506 ($549) a month, hardly an amount sufficient to live on, as UBI is usually imagined.

Nevertheless, the study offered an opportunity to test how getting no-strings-attached money would change recipients' job-seeking behavior and affect their mental health. Unlike previous smaller experiments, a control group was included.

Opponents of UBI argue free money will cause people to choose not to work, undermining society's capacity to make the payments in the first place. A survey sent to all participants and controls, along with in-depth interviews of a random sample, contradicts this.

“Some people said the basic income had zero effect on their productivity, as they continued to be in poor health, or there were still no jobs in the area they were trained for,” said Professor Helena Blomberg-Kroll of the University of Helsinki in a statement. “But others said that with the basic income they were then prepared to take low-paying jobs they would otherwise have avoided, as the basic income and the wages from the job together added up to a normal salary.”

The claims were supported by the fact recipients of UBI worked slightly more days on average than members of the control group (78 to 73 in the second year of the study). Some people described using the money to start a business. “While the outcomes weren’t always positive, the basic income had given them the possibility to try and live their dreams,” Blomberg-Kroll said.

Twenty-two percent of those receiving guaranteed payments described themselves as depressed, compared to 32 percent who had to prove their worthiness to the welfare bureaucracy. Satisfaction with life was also higher.

Recipients also reported greater trust in other people and society at large, both of which can be important predictors of pro-social behavior. Some recipients described being able to provide assistance to family and neighbors thanks to the extra security.

The Covid-19 pandemic has demonstrated how useful UBI would be in a disaster, putting a safety net under those who lose their job or business. However, this study indicates it is no panacea. Blomberg-Kroll noted the payments have not been transformative for those facing particularly difficult life circumstances before the trial started.

Helsinki University's Professor Heikki Hiilamo took a more skeptical view, noting that the absence of a baseline assessment of mental health, and changes to the welfare system partway through the trial called into question whether UBI was the reason for the measured differences.

 

[H/T The Guardian]

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