In January of 2017, Kansaneläkelaitos or commonly known as Kela, the Social Insurance Institution of Finland conducted a two year experiment to test the basic income. The experiment involved randomly chosen 2000 unemployed Finns and giving them an unconditional monthly basic income of €560 (USD 634 approx.) for the experimental period. The overall budget of the experiment was €20 million (USD 22.5 million approx.).1
The primary objective of this experiment was to determine how provision of basic income affected the income, well-being and employment status of the participants. Basically, the experiment was to determine if the citizens, after receiving a basic income, would be influenced to accept work even if it may be a casual or temporary one. Additionally, the purpose was to ascertain if the current social security system was actually functioning at its best with full efficiency for the benefit of the citizens and if reforms were required.
Findings of the Experiment:
The results released by Kela on 8 February, 2019, are of the first year’s experiment period and a complete report on the full span of experiment with the results will be available in 2020. Nevertheless, the preliminary results of the experiment concluded that:
- The provision of basic income did not increase the employment level of the participants involved in this study.
- The experiment proved the improvement in recipients‟ well-being with the basic income, as they reported decreased stress and health problems.
- The recipients were positive and confident about the possibility of securing employment.
- The recipients of the basic income indicated that there was less bureaucracy involved whilst claiming the social security benefits and were more likely to accept job offers in comparison to the control group.
Note: The control group comprised of the Finnish citizens who were unemployed during the experimental period and were receiving unemployment benefits from Kela but were not selected for the experiment.
What can be deduced?
The experiment has received a significant attention, especially as the idea of Universal Basic Income (UBI) although not a new concept, has recently gained popularity. However, the experiment was not about the UBI, which provides all citizens of a country a certain amount of money, irrespective of their income or their status of employment. The experiment in this case was only about providing money to a certain group/number of people who were unemployed and not to all citizens. Having said that, the experiment does relate to the idea of providing „free money‟ to the citizens and hence appeals the interests of people that are for, and against, the idea of free money.
The concept and popularity of the UBI scheme in recent times has gained momentum because it is perceived to address two pressing issues that calls for our immediate attention. The first one being poverty and the second being the integration of artificial intelligence in the job sector. So much so that, Mark Zuckerberg, Elon Musk and Richard Branson have strongly advocated for the UBI scheme as they fear that the growth of Artificial Intelligence (AI) will cause job destruction as there will be fewer jobs left that robots cannot do better than fellow sapiens.2
Many countries, such as Canada, Scotland and Kenya are already conducting basic income experiments in some parts locally.3 Similarly, our immediate neighbour down South has already conducted pilot experiments in the past in certain rural villages which have reported to yield positive results.4 In fact, the current primary opposition party in India, the Congress party, has even promised to implement a full scale universal basic income scheme at least if not for all then for the poor if it gets elected.5 Only time will tell if the Congress Party will get elected and implement the UBI scheme.
Although the experiment was not about the UBI scheme per se, it did show in this experiment that providing free money does not really improve employment levels. Those arguing for the provision of basic income may have something less to cheer about as the outcome was something that they may not have hoped for. Yet, for their consolation, the experiment did show that basic income tends to improve well-being, at least of the lucky ones who received it.
However, as the experiment included a sample size of only 2000 people and not all the citizens, it would be hard to deduce if the experiment would be significant enough at least in a large scale implementation. Furthermore, the experiment did not take into account the availability of the number or type of job opportunities and the amount of disposable income.6 Hence, unless all these factors are taken into consideration and basic income is implemented on a large scale preferably countrywide basis, the significance of the UBI remains illusive.
- “Kela. Basic Income Experiment 2017-18”. https://www.kela.fi/web/en/basic-income-frequentlyasked-questions#what-did-the-experiment-cost-
- “ What billionaires and business titans say about cash handouts in 2017 (Hint: lots!)”: CNBC. December 2017. https://www.cnbc.com/2017/12/27/what-billionaires-say-about-universal-basic-income-in2017.html
- “Finland’s Basic Income Experiment Kind of Works, but Not in Employment Terms”. Fortune. February 8, 2019. http://fortune.com/2019/02/08/basic-income-finland-employment/
- “INDIA: Basic Income Pilot Project Finds Positive Results. Basic Income News”. September 2012. https://web.archive.org/web/20150209170906/http://binews.org/2012/09/india-basic-income-pilotproject-finds-positive-results/
- “India: Basic income is being promised to all poor people in India”. Basic Income Earth Network. February 1, 2019. https://basicincome.org/news/2019/02/india-basic-income-is-being-promised-to-allpoor-people-in-india/
- “Finland gave people free money. It didn‟t help them get jobs — but does that matter?”. Vox. February 9, 2019. https://www.vox.com/future-perfect/2019/2/9/18217566/finland-basic-income