Finland tests an unconditional basic income

The Economist

JUHA JARVINEN, an unemployed young father in a village near Jurva, western Finland, brims with ideas for earning a living. “I’m an artist and entrepreneur. Sometimes I’m too active, I don’t have time to stop,” he says. He just agreed to paint the roofs of two neighbours’ houses. His old business, making decorative window frames, went bust a few years ago. Having paid off debts, he recently registered another, to produce videos for clients.

Mr Jarvinen says that for six years he had wanted to start a new business but it had proved impossible.

The family got by on his wife’s wages as a nurse, plus unemployment and child benefits. Mr Jarvinen had a few job offers in the main local industries—forestry, furniture-making and metalwork. But taking on anything short of a permanent, well-paid post made no sense, since it would jeopardise his (generous) welfare payments. To re-enroll for benefits later, if needed, would be painfully slow. “It is crazy, so no one will take a bit of work.”

Mr Jarvinen’s luck turned in January. That is when he was picked at random from Finland’s unemployed (who total 10% of the workforce) to take part in a two-year pilot study to see how getting a basic income, rather than jobless benefits, might affect incentives in the labour market. He gets €560 ($624) a month unconditionally, so he can add to his earning without losing any of it. Not only is he active in seeking work and creating a business, he also says he is much less stressed, relieved from the “silly show” of filling out monthly forms or enduring official interviews to prove his job-seeking efforts.

If Mr Jarvinen is making progress, it is too soon to draw overall conclusions. Kela, Finland’s national welfare body and the organiser of the pilot, will not contact participants directly before 2019, lest that influences outcomes. Instead it monitors things remotely, using national registers of family incomes, taxes paid, purchases at state-run pharmacies and more. These (anonymised) data will be made available to researchers, who might ask, for example, if consumption of antidepressants changes among grant recipients.

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