Imagine a country where the government would pay each citizen the same basic income each month. You could be employed or unemployed, poor or wealthy – you’d still get the same amount of money as other people.
What effect would this have on the labour market, on people’s happiness, and on societal structure as a whole? Would people quit jobs they are unhappy with and choose unemployment instead? Would they use the money to build the business of their dreams? Or would the guaranteed income make no difference to their behaviour at all?
Finland set out to test some of these questions in the world’s first statutory basic income experiment, carried out in the country between 1 January 2017 and 31 December 2018. The experiment was part of an effort by the Finnish government to study ways it could transform the country’s welfare-state model, reduce bureaucracy, and incentivize people to explore labour-market opportunities.
Unchanged work-life, but greater wellbeing
During the two-year period, a treatment group of 2,000 randomly-selected unemployed people between the ages of 25 and 58 received a basic income of EUR 560 per month. This figure roughly corresponded to the net amount of monthly basic unemployment benefits in Finland. The control group comprised everyone else in Finland receiving basic unemployment benefits.
The preliminary results of the experiment were covered in a February 2019 report from Finland’s Ministry of Social Affairs and Health. This report was widely covered in both the Finnish and international media, with the broad conclusion that the experiment had failed to live up to certain expectations.
It had been hoped that providing the 2,000 members of the treatment group with the security of a fixed sum of money each month would have encouraged greater participation in the labour market. But this was not the case. In the first year of the study, those in the treatment group had only half a day more employment than those in the control group.
The preliminary report did reveal something else though: the wellbeing of people receiving the basic income was better than those in the control group. A survey at the end of the study showed that the test group had fewer health problems, lower stress levels, and could concentrate better. They also had more confidence in their own futures.
An in-depth look at diversity
Since the experiment’s completion, several additional evaluations have been performed from different perspectives. One of these is a qualitative study by University of Helsinki researchers, who conducted 81 in-depth interviews with members of the treatment group from all over Finland. The study is included in the full report on the basic income experiment published in May 2020.
The project was led by Professor Helena Blomberg-Kroll, working together with university lecturer Christian Kroll and doctoral student Laura Tarkiainen (who is also a qualified social worker). All are from the Swedish School of Social Science at the University of Helsinki.
Professor Blomberg-Kroll, who has been studying Nordic welfare issues for more than 20 years, explains how qualitative research is important for understanding the differences in people’s experience of the basic income experiment.
“To interview the 81 participants in our study we travelled from the southernmost point of Finland to far up north, meeting people in the location of their choice – be it their home, a library, or a hotel lobby,” says Prof. Blomberg-Kroll. “When the participants saw that we would travel 500 kilometres or more to meet them on their own terms, then they were more inclined to share their stories with us and explain the reasoning behind the choices they made during the experiment.”
Zero effect on productivity and increased sense of autonomy
The team would eventually gather nearly 4,000 pages of interviews, using a theoretical framework inspired by the work of German-American philosopher Hannah Arendt (1906-1975). Arendt viewed human activity through three modalities – labour, work and action – each of which provides a different perspective on people’s experience of the basic income experiment.
“Looking at the experiment in terms of Arendt’s modality of labour is mainly about understanding its effects on the traditional labour market,” says Prof. Blomberg-Kroll.
“From this perspective, the responses we got from interviewees were often quite contradictory. For instance, some people said the basic income had zero effect on their productivity, as they continued to be in poor health, or there were still no jobs in the area they were trained for.”
“But others said that with the basic income they were then prepared to take low-paying jobs they would otherwise have avoided, as the basic income and the wages from the job together added up to a normal salary,” says Blomberg-Kroll. “Some said the basic income allowed them to go back to the life they had before they became unemployed, while others said it gave them the power to say no to low-paid unsecure jobs, and thus increased their sense of autonomy.”
Arendt’s second modality – the modality of work – means looking at human activity and productivity beyond pure employment terms. It’s about understanding the extent to which people are living the professional lives they want to have. Viewed through this lens, the researchers also found significant diversity in the participants’ experiences.
“Freelancers and artists had more positive views on the effects of the basic income, which some felt had created opportunities for them to start businesses,” says Blomberg-Kroll. “Some entrepreneurs were very eager to try and build something during the limited two-year period. While the outcomes weren’t always positive, the basic income had given them the possibility to try and live their dreams.”
“Part of the solution in times of economic hardship”
Finally, Arendt’s modality of action means understanding how the basic income experiment influenced the way in which participants got involved in societally-oriented activity. This included performing voluntary work or engaging in broader societal issues.
“Some found the guaranteed income increased the possibility for them to do things like providing informal care for their family or their neighbours,” says university lecturer Christian Kroll. “The security of the basic income allowed them to do more meaningful things, as they felt it legitimized this kind of care work. Many of the people who performed such unpaid activities during the two-year period referred to it as work.”
The full report on the basic income experiment also included the results of a survey measuring Finnish popular opinion on basic income. In the survey, 46% of respondents agreed or somewhat agreed with the statement that a basic income should be introduced as a permanent part of the Finnish social-security system.
“The results from our study could support many of the arguments that have been presented both for and against basic income,” Christian Kroll says. “But as we’ve all learned in the early part of 2020, insecurity is not a good way to live. While basic income can’t solve all our health and societal problems, there is certainly a discussion to be made that it could be part of the solution in times of economic hardship.”
Read the full report on the Finnish basic income experiment (Social Insurance Institution of Finland, Kela)
The basic income experiment in Finland yields suprising results
Heikki Hiilamo: ”Disappointing results from the Finnish basic income experience”