Experiment in Finland: Basic income is good for you

Sini Marttinen had lived abroad for five years, in Brussels, Hong Kong, Copenhagen and Edinburgh, when she returned to her Finnish homeland. Because she couldn’t find a steady job straight away, she was allowed to participate in a lottery.

It was a very special lottery: an unconditional basic income was raffled, and Marttinen was lucky. From the beginning of 2017, she received 560 euros a month from the state for two years, unbureaucratically, without conditions and without having to account for her expenses to anyone.

The pilot project helped her on her way to self-employment – “I was able to take the risk,” she says. “The basic income made me feel enormously strengthened psychologically.” At the end of 2018, she opened Café Bruket in the Finnish capital Helsinki, with two partners and three permanent employees.

For years the unconditional basic income has been one of the political ideas that inspire millions of people all over the world, including in Germany. According to a study by the German Institute for Economic Research, a good half of Germans are in favor of providing all citizens with basic livelihoods.

Shining eyes on the left – and some liberals

The corona crisis has given the debate in this country a further boost. Several online petitions collect votes for the introduction of an unconditional basic income. A call that was completed in the summer attracted almost half a million supporters. A Berlin activist recently sent almost 180,000 signatures to the German Bundestag.

For the funded by donations Pilot project “My Basic Income” more than two million applicants have registered. For three years, 120 participants should receive 1200 euros a month. According to the present plan, what this money does with their lives is scientifically examined in detail and compared with the experience of a comparison group that does not receive any money from the program.

Supporters of the idea can be found primarily among young people with a good education, who are politically more left-wing, and among people with relatively low incomes. But not only on the left side of the political spectrum does the unconditional basic income make eyes shine. Quite a few market liberals see the appeal of the model in the fact that it could have what it takes to save entire bureaucracies and encourage people to develop their potential.

But nobody knows exactly what would really happen. That is why all eyes were on Finland three years ago. The model project in the far north of Europe should finally provide information on whether the high hopes are justified – or whether the money given may lead the recipient to laziness, as critics fear.

A group of experts had prepared a unique large-scale experiment under the umbrella of the Finnish social welfare authority Kela. 10,000 participants across the country should receive an unconditional basic income for several years, young and old, singles and parents, the unemployed as well as low-wage earners and those with good incomes.

Less stress, depression decreased

But then the beautiful plan was radically shrunk by the conservative government coalition. When the experiment started in 2017, 2000 unemployed people between the ages of 25 and 58 took part. The comparison group consisted of recipients of unemployment benefits.

In August of this year, the experts presented their final report, with a clear result: Basic income is good for you. Kela research director Minna Ylikännö says: “Those receiving a basic income had fewer health problems and symptoms of stress than the people in the comparison group” – depression in particular fell.

The rules were changed during the model test

According to the study results, this also has an effect on self-esteem. Ylikänno found out about the test participants: “They had greater confidence in their personal future and their chances of participating in society.” However, Ylikännö is unable to say exactly what that means: Unfortunately, the two-year period of the project is not sufficient for more precise determinations.

The evaluation was made more difficult by the fact that the rules for the comparison group were changed during the ongoing model test. Like all recipients of unemployment benefits in Finland, she received state benefits only under more stringent conditions. “That makes it difficult to assess the employment effect,” says Ylikännö.

The statistics show that the basic income group had a job for a longer period on average: In the second year of the project, the participants worked an average of 78 days. In contrast, the members of the comparison group found a paid job out of unemployment for only 73 days. However, by the standards of the Finnish scientists, this difference is not considered significant.

There aren’t too many hopeful stories like that of Sini Marttinen. The café operator is now confident that she will survive the corona crisis. Because many Finns continue to work from home, the important business with lunch has declined. “But we are creative, we survive,” says Marttinen.

With her café, she doesn’t just want to do something for herself, but also for others. She prefers to employ young people who come from difficult backgrounds. “It’s also a social project for all of us, but without public subsidies,” she says. The location was chosen deliberately: after a five-minute walk in one direction, you come to a prison, after five minutes in the other direction, you come to a homeless shelter.

Still, Marttinen sees herself primarily as a businesswoman, not a social worker. “I want to make money by doing something meaningful.” She is grateful for the support from the temporary basic income. She thinks the model is good: “There is still a great stigma attached to unemployment, people don’t like to talk about it when it concerns them.”

It is therefore not surprising that only a few participants in the Finnish social experiment are willing to speak publicly about their experiences. At the beginning of the program, she was annoyed by comments in the social media in which the recipients of the basic income were defamed as “lazy people”. “I counter this: You can work hard and still suddenly find yourself without a job.”

Icon: The mirror

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.