Finland pushes ahead with basic income trial

By on 28/10/2016
Finland's Prime Minister Juha Sipilä

The government of Finland is to trial a new ‘basic income’ model that it hopes will pave the way for broader reforms of the country’s social security system.

The concept has been on the drawing board for several months and is intended to encourage benefit claimants into employment by reducing “incentive traps”, according to the country’s Ministry of Social Affairs and Health.

Under the pilot, 2,000 randomly selected recipients of unemployment benefits from Kela, Finland’s social security agency, will receive a basic income of €560 – replacing all existing benefits. Those selected will have to participate in order to continue receiving benefits, and a research consortium will study their behaviour and life choices to determine whether or not the provision of a basic income encourages them into employment.

“Basic income that encourages people to work has for years been among the goals of several political parties. Prime Minister Juha Sipilä’s government is now the first one to take concrete action by implementing a basic income experiment, as promised in the government programme,” said Finland’s minister of local government and public reforms, Anu Vehviläinen.

Variants of the basic income concept are gaining traction in other parts of the world, such as the UK, where Labour Party leader Jeremy Corbyn is considering a universal basic income for all UK citizens. A similar model was rejected by voters in Switzerland in a June referendum.

The Finnish basic income model has been explicitly designed to reduce dependency on welfare by encouraging people into the labour market.  According to government documents, the €560/month (UK£503 or US$611) available under the trial has been calculated to produce an “adequate incentive effect” encouraging participants to accept temporary or part-time work.

The initial phase of the Finnish trial will begin in early 2017 and run until November, after which the government will decide on whether or not to proceed with a larger second phase.

“The second phase would start in early 2018, and it could even include different kinds of taxation measures, for example, that could not be finalised for the first phase due to tight schedules,” said Finnish minister of social affairs and health, Pirkko Mattila. “Overall the basic income experiment is unique even in international terms, and many thanks are due already now for those involved in the preparations.”

As well as potentially heralding a more fundamental reform of Finland’s welfare system, the pilot is also significant as it represents one of a number of so-called policy “experiments” the Finnish government is launching in the coming months to trial on a limited basis potential solutions to persistent problems.

Think-tank Demos Helsinki has been an advocate of the experimentation approach. Its head of research, Aleksi Neuvonen, wrote in a blog post earlier this year: “This new form of policy-making has come to be known as ‘co-design’ or ‘co-creation’ of policy. In short, the term refers to the engaging of relevant stakeholders and citizens in the policy-making process from its early phases onwards… More human-centred and experimental governmental steering can encourage trust and make policy more user-oriented, targeted and efficient.”

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See also:

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Finland publishes €1bn implementation plan

 

 

About Ben Willis

Ben Willis is a journalist and editor with a varied background reporting on topics including public policy, the environment, renewable energy and international development. His work has appeared in a variety of national newspapers including the Guardian, Daily Telegraph and Times, as well as numerous specialist business, policy and consumer publications.

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