Finland’s basic income trial boosted ‘wellbeing’ but not employment

New Zealand isn’t the only country trying to improve wellbeing.

Reuters:  Finland’s basic income trial boosts happiness but not employment

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 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 — the world’s happiest country last year, according to the United Nations — is exploring alternatives to its social security model.

The trial was 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 ($635) “seems to have been minor on the grounds of the first trial year”.

But participants in the trial were happier and healthier than the control group.

“The basic income recipients of the test group reported better wellbeing in every way (than) the comparison group,” chief researcher Olli Kangas said.

Chief economist for the trial Ohto Kanniainen said the low impact on employment was not a surprise, given that many jobless people have few skills or struggle with difficult life situations or health concerns.

“Economists have known for a long time that with unemployed people financial incentives don’t work quite the way some people would expect them to,” he added.

Giving unemployed people more money should improve their wellbeing and it should also help with improving happiness if it makes it easier for them to survive financially.

But going by this, on it’s own it isn’t a solution to unemployment.

If so then the question for a basic income is how much more money a country wants (and can afford) to give people living on benefits. The amount could make a significant difference – if they make it too generous then it’s likely more people will choose unemployment as a financially viable option, further increasing the costs.

I wonder if Jacinda Ardern and Grant Robertson have something like this in mind for their ‘wellbeing’ budget.