Thursday. 18.04.2019
El tiempo

Basic income recipients experienced less financial insecurity

Participants in the experiment also had more trust in other people and in societal institutions as politicians, political parties, police and the courts

Basic income recipients experienced less financial insecurity

Less stress, more confidence in their possibilities of finding a job and also fewer financial worries.

This summarizes the perception of the participants in the basic income experiment conducted in Finland during the last two years. The initiative was carried out on a population of 2,000 non-voluntary unemployed people randomly selected, who received a basic tax-exempt monthly payment of 560 euros.

The Finnish Social Security institution of Finland (Kela) just published some of the conclusions of a survey which demonstrates that participants in this experiment "described their financial situation more positively than respondents in the control group". Kela says that "even recipients who felt that their income was inadequate to their needs reported less stress than the control group".

According to Signe Jauhiainen, from the Social Security institution, "the findings are interesting in that previous research has shown financial difficulties to be a bigger contributor to stress than other problems of everyday life". Still, the observations are preliminary and require further analysis.

Reinforces confidence in the society

One interesting observation highlighted by Kela is that a benefit such as the basic income contributes to reinforce confidence in the society. "Respondents who received a basic income had more trust in other people and in societal institutions –politicians, political parties, police and the courts– than members of the control group", says the release published in Kela's website..

The respondents reported their trust on a scale of 0 to 10 (0= do not trust at all, 10 = trust completely). The average score for trust in other people was 6.8 among basic income recipients and 6.3 in the control group.

As for trust in politicians and political parties, the average score among basic income recipients was 4.5 compared to 4.0 among members of the control group. The average scores for trust in courts and the police were 7.2 and 6.9 respectively among basic income recipients and the control group members.

Recipients of a basic income also expressed greater confidence in their ability to have influence over their own lives, in their personal finances and in their prospects of finding employment (3.2) than members of the control group (2.9, scale of 1 to 5, 1 = bad confidence; 5 = good confidence). These differences persisted even when various background factors, such as age, gender, educational attainment, health and place of residence, were controlled for.

Essential to build durable well-being

According to Minna Ylikännö of Kela, "trust in other people and in institutions is essential both to individual well-being and to the functioning of society at large".

The survey was carried out by means of phone interviews immediately before the experiment was concluded. The response rate was 23% (31% for the recipients of a basic income and 20% for the control group). The survey data makes it possible to investigate individual experiences of economic well-being, financial control, stress and trust.

Persons who received a basic income during the experiment had no obligation to participate in services offered by the employment authorities. Nevertheless, they participated in such services nearly as much as others.

Register data for the first year of the experiment suggests that the basic income experiment did not have any effect on employment.  The recipients were no more –or less– likely to be gainfully employed than members of the control group.

Support for social security reform

The evaluation study of the basic income experiment generates data that can be used when reshaping the social security system. More results will become available during 2019 and 2020.

In the experiment, 2,000 randomly selected unemployed persons were paid a monthly tax-exempt basic income of 560 euros regardless of any other income they may have had or whether they were actively looking for work. The experiment was begun on 1 January 2017 and ended on 31 December 2018.

The recipients of a basic income were selected through random sampling among those who in November 2016 received an unemployment benefit from Kela. The control group consisted of those who in November 2016 received an unemployment benefit from Kela but were not selected for the experiment.

The experiment was launched by the Government of Prime Minister Juha Sipilä. The aim was to study how it would be possible to reshape the Finnish social security system so that it better meets the challenges posed by changes in working life. The experiment was implemented by the Social Insurance Institution of Finland (Kela).

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