Finland to trial basic income for the unemployed

Two-year experiment will see out-of-work Finns receive €560 each month – even if they find a job

Finnish flag, Finland
Finland topped the list for the second consecutive year
(Image credit: Getty Images)

Finland is to replace unemployment benefits with a guaranteed basic income in a trial the government hopes will end the cycle of welfare dependence said to keep people out of work.

In the first European test of its kind, out-of-work Finns will receive a monthly €560 (£473) payment, equal to the current level of unemployment benefit but with no conditions attached. It will continue to be paid even after receiving a job.

A random selection choose 2,000 people to take part in the two-year experiment, which will test one of the key theories behind basic income - that it can reduce the "disincentive problem" whereby those on welfare stand to gain little, or even lose money, by taking employment.

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"It's highly interesting to see how it makes people behave," Olli Kangas, research director at government benefit agency Kela, told the Associated Press.

"Will this lead them to boldly experiment with different kinds of jobs? Or, as some critics claim, make them lazier with the knowledge of getting a basic income without doing anything?"

Finland's current social security system is "generous and complex", says The Guardian, which perhaps accounts for basic income's unusually high degree of popularity in the country - polling showed the idea was welcomed by a majority of cross-party voters.

Prime Minister Juha Sipila's centre-right administration has embraced an experimental approach to tackling the country's unemployment rate, which has remained at 8.1 per cent for more than a year.

In his end of year address, Sipila said that with "no additional funding available" to tackle growing wealth disparity, solutions would be sought in "major reform projects" of existing institutions. The basic income trial is among 20 large-scale social experiments planned over the coming months.

"Basic income has been envisioned as a solution for rising inequality, exacerbated by the explosion of robotics and the automatisation of routine work," says Nordic think-tank Demos Helsinki.

Trials are also being discussed in Switzerland, the Netherlands and Oakland, California.

Critics dismissed basic income as an unworkable fantasy.

In an article in The Independent, Emran Mian, director of the Social Market Foundation, says the conditions needed to make the system viable render it indistinguishable from the current welfare system.

He writes: "When a sensible proponent of the universal basic income starts to get into detailed issues of design, their deceptively simple concept collapses into the usual messiness of government policy."

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