Finland's Universal Basic Income Had a Surprise Effect on People's Beliefs
Finland has completed a major trial into the effects of a basic income, and the preliminary results are positive. Recipients felt happier, less stressed, trusted politicians more, and even felt more comfortable on the same levels of income as people that did not receive a basic income.
“The findings are broadly positive, but there are still a lot of unanswered questions,” Luke Martinelli, a research associate from the Institute for Policy Research at the University of Bath, tells Inverse. “There are some significant results on self-reported well-being and levels of trust in other people and institutions.”
The findings, shared in the Helsinki-based House of the Estates Friday morning, cover one of the most ambitious basic income experiments ever conducted. The experiment, launched by Prime Minister Juha Sipilä in January 2017 and that concluded on December 31, saw 2,000 unemployed Finns receive €560 ($634) per month without conditions. The researchers compared their experiences with a control group of a further 5,000.
It’s a radical idea, one that has attracted more attention as a means of making people feel secure in an increasingly automated world. Elon Musk, Richard Branson and Sam Altman have all supported the idea of paying everyone a monthly sum without means testing, as robots and A.I. threaten to take over existing jobs. Andrew Yang is running for president to protect Americans from Silicon Valley-fueled job losses, while Rahul Gandhi wants to use a minimum income guarantee to lift Indians out of poverty. Finland’s experiment, its proponents hope, will show to legislators the real-world benefits of such a policy.
“The truth limits the decision makers, and the more we have truth the better policy making,” Ohto Kanninen, research coordinator at Labour Institute for Economic Research, said in remarks translated from Finnish.
The initial results only cover the first year of the study: the full results are expected in the spring of 2020, and a more detailed comparative analysis is expected in 2021. Despite the preliminary nature of the results, survey data showed the basic income is already having a positive effect.
“The experimental groups clearly experienced fewer problems related to health, stress, mood, and concentration,” Minna Ylikännö, senior researcher at government social security institution Kela, said in remarks translated from Finnish. “They had more trust in their future and their possibility to influence societal matters. General trust, that is trust in other people, was stronger and they trusted the politicians more than the control group.”
While trust in politicians ranked higher, trust in other authorities like the police and judiciary saw no significant movements. There was, however, a stronger belief that they could gain employment in the future. Recipients also reported higher levels of satisfaction with income levels when compared with control group members on similar income levels.
“This is due to this income being so secure,” Ylikännö said. “It is paid unconditionally without bureaucracy directly in one’s bank account and they can trust in getting this sum of money, every month, regularly, without having to stress for it in any way.”
The survey data was collected by via phone interview in the fall of 2018. As with most surveys of its kind, the response rate was relatively low. The researchers also had to account for the fact that the experiment participants tended to have larger households with more children than the control group.
Less clear at this stage is the effects on employment. Recipients were able to choose whether to continue receiving unemployment benefit alongside the basic income, and almost all of them chose to do so. There was little statistical difference in employment between recipients and the control group.
“This means that the most pessimistic predictions of labor market exodus haven’t transpired, but there is no evidence of positive effects on labor market participation either,” Martinelli says. “From these results we can’t even say conclusively that there are no effects — it might be that the labor market response varies for different groups, with some more likely to find employment and others less, with the effects ‘netting out’ — but we don’t know if that is the case here.”
Another theory, suggested by Ylikännö, is that a disparity between higher wellbeing and flat employment rates after just one year is “common sense,” as “you have to have a good level of wellbeing before you are able to be employed.”
The experiment failed to live up to some of the biggest promises of basic income, that it can reduce bureaucracy by replacing other benefits and that it can extend to all regardless of employment status. Olli Kangas, scientific leader of the study and professor of practice at the University of Turku, cited funding and legislative limitations as some of the reasons why the end result did not match the initial report. However, Kangas stated in Finnish that “of the current experiments, I would say that this would be the best.”
Kangas lamented the cancellation of a similar project in Canada, axed last July by Ontario’s new Conservative government. He did, however, note that other authorities are experimenting with similar projects, like Barcelona’s B-Mincome scheme that started in October 2017. He also described the Italian government “citizens’ income” policy, which grants households earning less than €9,360 ($10,606) per annum up to €780 ($884) per month, as “interesting.”
Perhaps the biggest outcome from today is not the results themselves, but the ensuing discussion around these results. Finland is scheduled to hold a general election on April 14, which could mean a new government taking action based on the response.
“Media constructs a certain reality, and the politicians and decision makers react to this kind of reality and the spiral revolves around its axel,” Kangas said. “We are very interested in what this media-political speech will be. How will our results be framed?”