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Test of Finland's basic income: It creates happiness but not jobs
By JAN M. OLSEN of AP.
"A nationwide experiment with basic income in Finland has not
increased employment among those participating in the two-year trial,
but their general well-being seems to have increased, a report said
Friday.
The Social Insurance Institution of Finland, or Kela, said
"it was not yet possible to draw any firm conclusions" from the first
half of the experiment, where about 2,000 randomly selected, unemployed
people aged 25-58 got tax-free income of 560 euros ($636) a month with
no questions asked.
Finland is looking into ways to reshape its
social security system and became in January 2017 the first European
country to launch the trial, which will end in 2020.
Critics say universal basic income reduces incentives for people to look for work.
Proponents
say it can empower people to start new businesses, knowing that they
would continue to receive monthly income no matter how well their new
venture does. It can also encourage people to try a new job without the
fear of losing their unemployment checks or having to go through the
paperwork of reapplying for benefits.
"Earlier, I didn't accept
all small jobs out of fear of losing my benefits and having to reapply
for them," said writer Tuomas Muraja as he was on his way to a sauna
before heading out for an evening at the opera.
"I feel much more secure now that short-term jobs no longer reduce my benefits or delay their payment."
In
the Finnish experiment, the basic income is below what unemployment
benefits pay, which is 32.40 euros a day, or almost 1,000 euros ($1,135)
a month — subject to income tax of about 30 percent. The basic income
is tax free, but barely enough to live on for someone paying rent, so it
keeps pressure on the recipients to join the work force.
Minna
Ylikanno, a researcher with Kela, said the basic income recipients
appeared less stressed, healthier and more confident in the future than a
5,000-member control group of unemployment benefits recipients.
The
report found that those on basic income and the unemployed people in
the control group ended up working roughly the same number of days.
"The
basic income may have a positive effect on the wellbeing of the
recipient even though it does not in the short term improve the person's
employment prospects," Ylikanno added.
The participants in both
the trial and the control group were selected randomly among those who
received unemployment benefits from Kela in November 2016 , Ylikanno
told The Associated Press.
The Nordic country's official unemployment rate was 5.4 percent in 2018."
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