Finland's BIG trial boosts happiness, not employment

11 February 2019 | Economics

If you feel free, you feel safer and then you can do whatever you want. - Tuomas Muraja, Author: Finland

Anne Kauranen - Finland's basic income scheme did not spur its unemployed recipients to work more to supplement their earnings as hoped but it did help their wellbeing, researchers said on Friday as the government announced the trial's initial findings.

The two-year trial, which ended a month ago, saw 2 000 Finns, chosen randomly from among the unemployed, become the first Europeans to be paid a regular monthly income by the state that was not reduced if they found work.

Finland, which will hold parliamentary elections in April, is exploring alternatives to its current social security model.

The project is being watched closely by other governments who see a basic income as a way of encouraging the unemployed to take up often low-paid or temporary work without fear of losing their benefits. That could help reduce dependence on the state and cut welfare costs, especially as greater automation sees humans replaced in the workforce.

Finland's minister of health and social affairs Pirkko Mattila said the impact on employment of the monthly pay cheque of 560 euros (US$635) "seems to have been minor on the grounds of the first trial year".

Wellbeing

But those in the trial reported they were happier and healthier than the control group.

"The basic income recipients of the test group reported better wellbeing in every way in comparison with the comparison group," chief researcher Olli Kangas said.

Sini Marttinen, 36, said that knowing her basic income was guaranteed had given her enough confidence to open a restaurant with two friends during the trial period.

"I think the effect was a lot psychological," the former IT consultant told Reuters. She had been unemployed for nearly a year before "winning the lottery", as she described the trial.

"You kind of got this idea you have two years, you have the security of 560 euros per month... It gave me the security to start my own business," she said.

The basic income was only 50 euros a month more than her jobless benefit had been, "but in an instant you lose the bureaucracy, the reporting", Marttinen said.

Mira Jaskari, 36, who briefly found a job during the trial delivering newspapers but lost it due to poor health, said losing the basic income had left her feeling more insecure about money.

Overhaul

The centre-right government's original plan was to expand the basic income scheme after two years as it tries to combat unemployment which has been persistently high for years but reached a 10-year low of 6.6% in December.

It took a different tack last year, however, by imposing benefits sanctions on unemployed people who refused work.

The basic income has been controversial in Finland, with leaders of the main political parties wary of offering "money for nothing". Prime minister Juha Sipila said in December that he saw it as a means of simplifying Finland's "screamingly complex" social security system.

On Thursday, Sipila's Centre Party proposed a welfare model in which only the poor could claim the basic income, with sanctions if they reject a job offer.

Schemes

Conservative finance minister Petteri Orpo has meanwhile said he favours a scheme like Britain's Universal Credit, which consolidates six different types of state benefits into one.

Italy is due to introduce a "citizens' wage" in April in a major overhaul of the welfare state, which will offer income support to the unemployed and poor.

One issue with the Finnish pilot is that it did not include any tax claw-back once participants found work and reached a certain income level, which the researchers had said would make the results more realistic. The Organisation for Economic Co-operation and Development has warned that basic income schemes would need to be paid for with higher taxes.

Positive

Participants were generally positive, however, with Tuomas Muraja, a 45-year-old journalist and author, saying the basic income had allowed him to concentrate on writing instead of filling out forms or attending jobseekers' courses.

He published two books during the two-year trial period but said its closure meant it had again become difficult for him to accept small freelance commissions. "I ... can earn only 300 euros per month without losing any benefits," he said.

"If people are paid money freely that makes them creative, productive and welfare brings welfare," Muraja told Reuters about his experience of the scheme.

"If you feel free, you feel safer and then you can do whatever you want. That is my assessment." – Nampa/Reuters

Similar News

 

ACC: Budget not enough to fight graft

1 hour ago | Economics

CATHERINE SASMAN The Anti-Corruption Commission (ACC) says the N$61.6 million budget proposed for its operations is woefully inadequate.The...

E-tax rollout postponed again

1 hour ago | Economics

The finance ministry introduced a new electronic income-tax filing system in January, but deadlines are repeatedly being postponed.The date when the new system must become...

Chinese N$10bn loan still on the table

1 day - 23 April 2019 | Economics

OGONE TLHAGE The Namibian government is under no obligation to take up any loan offered to as part of a memorandum of...

China 'taking advantage' of Nam

1 day - 23 April 2019 | Economics

The minister of international relations and cooperation, Netumbo Nandi-Ndaitwah, recently advised a hall full of young Namibians to familiarise themselves with the content and implications...

BoN expects economic growth of 0.3%

1 week ago - 15 April 2019 | Economics

The Bank of Namibia (BoN) expects the economy to grow by 0.3% this year, according to its latest Economic Outlook released today.The Namibian economy was...

Recession butchers jobs

2 weeks ago - 10 April 2019 | Economics

Jo-Maré Duddy – From 2016 to 2018, Namibia’s total population increased by 3.8%, its population of working age expanded by 3.6%, the economically active population...

On tax-free allowances and inequality

2 weeks ago - 10 April 2019 | Economics

Sometimes, well-meant interventions have unintended consequences.One case in point are tax-free allowances, such as tax-free housing allowances, tax-free car allowances, tax-free pension fund contributions, etc....

Sub-Saharan economic growth recovery to take longer

2 weeks ago - 10 April 2019 | Economics

Omar Mohammed - The World Bank has cut its growth forecast for Sub-Saharan Africa this year to 2.8% from an initial 3.3%.The commodity price slump...

Survival in arid eastern Chad depends on struggle for...

2 weeks ago - 10 April 2019 | Economics

Amaury Hauchard - "I've already earmarked a customer for this drum - I need to get a move on!"Ali Ahmat, 12, flicks his whip to...

No more manna for SOEs

3 weeks ago - 29 March 2019 | Economics

In what has become a yearly occurrence, the government has yet again decided to give the lion's share of the budget for state-owned enterprises to...

Latest News

Warning of dire food shortages

1 hour ago | Disasters

The latest Crop Prospects, Food Security and Drought Situation Report has predicted massive reductions for all crop-producing areas in the expected harvest season, including cereal...

Solving your challenges with remuneration

1 hour ago | Business

We live in an environment of continued cost-constraints, skills shortage and labour mobility. At the same time, there is pressure to improve productivity, and improve...

ACC: Budget not enough to...

1 hour ago | Economics

CATHERINE SASMAN The Anti-Corruption Commission (ACC) says the N$61.6 million budget proposed for its operations is woefully inadequate.The...

Do good for others

1 hour ago | Opinion

Human rights are needed to protect and preserve every individual's humanity. The Universal Declaration of Human Rights is clear in highlighting the basic rights and...

Violent Easter weekend

1 hour ago | Crime

The four-day Easter weekend was marred by a spate of violent crimes including a dozen reported sexual assaults and armed robberies, in addition to a...

Watch your mouth

1 hour ago | Politics

Only half of Namibians believe that they have the right of freedom of association, says an Afrobarometer policy paper titled 'Are Africans' freedoms slipping away?'...

E-tax rollout postponed again

1 hour ago | Economics

The finance ministry introduced a new electronic income-tax filing system in January, but deadlines are repeatedly being postponed.The date when the new system must become...

Managing fall armyworm

1 hour ago | Agriculture

The Food and Agriculture Organisation (FAO) has formulated a framework for partnerships for the sustainable management of fall armyworm in Africa which will focus on...

Meat Board sub-committees meet

1 hour ago | Agriculture

The Livestock Producers' Organisation (LPO) is represented on various sub-committees of the Meat Board and these committees met to discuss issues affecting the sector. The...

Load More