Published: Sun, February 10, 2019

Universal basic income boosts wellbeing, but not employment

Universal basic income boosts wellbeing, but not employment

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 hard life situations or health concerns.

Finnish officials say a nationwide experiment with basic income has not increased employment among those participating during the first year of the trial, but their general well-being seems to have increased.

The Finnish government's Social Insurance Institute (Kela) published mixed results Friday in its bid to find simpler alternatives to the Nordic nation's social security model that now includes sanctions on beneficiaries who turn down work.

The trial was Finland's test of one alternative to renewing its social security model, a vast task expected to be tackled after parliamentary elections in April.

With the trial, it tested offering a safety net for those who can not or choose not to work, while also seeking to encourage them to take often low-paid or temporary jobs without fear of losing their benefits.

However, they were also "no better or worse than the control group at finding employment in the open [labor] market", according to Ohto Kanninen, research coordinator at the Labour Institute for Economic Research.

Sini Marttinen, 36, had been unemployed for almost a year before "winning the lottery", as she described the trial.

"You kind of got this idea you have two years, you have the security of €560 per month. It gave me the security to start my own business".

Ms Mira Jaskari, 36, who briefly found a job during the trial delivering newspapers but lost it due to poor health, said losing the basic income left her feeling more insecure about money.

The centre-right government that put the policy into place had hoped that within a year, a significantly number of the recipients would be employed compared to a control group that did not receive the income.

However, the Organisation for Economic Co-operation and Development (OECD) assessed that income taxes would have to increase to cover the cost of UBI, with Finland having to increase theirs by 30 percent if it rolled out the wealth distribution scheme across the country.

Critics say universal basic income reduces incentives for people to look for work. The Finnish income and tax data bases are being used for the analyses.

Swiss voters rejected a similar scheme in 2016. The results for the second year of the experiment will be published in the first few months of 2020. The current leading party the Center has said that it supports basic income, but its vistas include application and requirements for the recipients, not considered as part of a basic income solution.

Last year, the newly elected Ford government of Ontario pulled the plug on a basic income pilot project created by the previous Wynne government.

"If you feel free, you feel safer and then you can do whatever you want".

This story has not been edited by Firstpost staff and is generated by auto-feed.

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