Basic income improves people’s mental well-being, but is ‘unsustainable’, according to the Finnish lawsuit
Free money makes people happy! Basic income improves people’s mental well-being, but is ‘unsustainable’, according to Finnish research
- 2,000 unemployed people received € 560 per month every month for two years
- Researchers found they had less sadness, loneliness, and mental tension
- But because of the income, they worked only six days longer over a one-year period
An experiment with ‘free money’ in Finland made people happier, but did not improve employment and would be ‘unsustainable’, a study found.
2,000 unemployed received a basic income of € 560 (£ 490) each month in a two-year trial to see if the system would work better than traditional benefits.
Participants in the Finnish study “were more satisfied with their lives and experienced less mental strain, depression, sadness, and loneliness,” researchers said.
But the Finnish study found that the awarding resulted in people only serving six days a year for a period of one year.
Finnish Prime Minister Sanna Marin has no plans to introduce such an income, although her health minister said the experiment would be useful for future social security reforms.
Finland spent € 20 million (£ 18 million) on a two-year trial with a basic income – but Prime Minister Sanna Marin (pictured) has no plans to introduce one
Proponents of a so-called universal basic income argue that it reduces bureaucracy and say that people will be more willing to take temporary or part-time work if it does not lower their benefits.
Traditional unemployment benefits in Finland can be docked as soon as the recipient starts to make money.
In the experiment, people were given the handout, regardless of whether they worked or not, and were free to spend the money however they wanted.
Researchers said people who received the money “described their well-being more positively” than those who did not.
“They also had a more positive perception of their cognitive abilities, namely memory, learning, and ability to concentrate,” researchers said.
The guaranteed monthly payment also increased participants’ confidence in others and in the institutions of society.
But Kari Hämäläinen from the Finnish VATT Institute of Economic Research said that basic income had only a “small” effect on employment.
The results suggest that for many people, “the problems associated with finding work are not related to bureaucracy or financial incentives,” he said.
Creating such income across the country would be expensive and “unsustainable,” he said Bloomberg.
The Helsinki government has allocated € 20 million (£ 18 million) for the two-year trial.
2,000 unemployed received a € 560 handout each month in a two-year experiment to see if the system would work better than traditional benefits
The Paris-based Organization for Economic Cooperation and Development (OECD) has previously claimed that a basic income program in Finland would not be economically viable and could leave a significant number of people worse.
Similar programs have previously been tried in Kenya, Canada, India and parts of the United States.
In 2017, Swiss voters rejected a proposed universal basic income in a referendum after critics condemned the idea as a reward for lazy and clumsy.
While the Finnish process was the broadest held in Europe in the past year, it was limited to participants who were already unemployed.
The experiment began in 2017, but took on additional significance as the coronavirus pandemic raised an increasing call for universal basic income.
The global economic standstill is likely to cost tens of millions of jobs around the world, as many countries face a catastrophic production decline.
In addition, experts have suggested that people are better able to follow public health advice if they are guaranteed income.
In fact, some countries have introduced a temporary basic income by sending human checks as part of incentive packages.
Before the coronavirus crisis, Finnish unions instead called for employers to pay living wages that do not need to be subsidized by benefits.