Finland’s ‘Free Money’ Experiment Failed to Encourage Unemployed to Find Work

BERLIN, GERMANY - JUNE 21: In this photo illustration a man removes Euro currency bills from a wallet on June 21, 2011 in Berlin, Germany. Eurozone finance ministers are currently seeking to find a solution to Greece's pressing debt problems, including the prospect of the country's inability to meet its …
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An experiment where unemployed Finns were given a basic income failed to encourage them to find work, researchers have found.

“The basic income experiment did not increase the employment of participants during the first trial year,” Kela, the Finnish government agency in charge of benefits, said in a statement on the project’s preliminary findings on Friday.

Kela, in conjunction with the Finnish Centre for Economic Research and other partners including the universities of Turku and Helsinki, began a two-year experiment in January 2017 where 2,000 randomly-selected unemployed people were given a monthly basic income of €560 (£490/$634) regardless of any other income they may have or if they were actively seeking employment.

Researchers found that while the free money had neither negative nor positive impact on the participants gaining employment, “those who received the basic income felt better at the end of the experiment than those in the control group.”

Kela researcher Miska Simanainen told the BBC that the experiment was undertaken to see if there was a way to reform the country’s social security system.

Mr Simanainen told the broadcaster that despite the results, he does not believe the trial had “failed,” rather that it “[gives us] new information that we did not have before this experiment.”

Universal Basic Income is supported by billionaire Silicon Valley elites including Facebook CEO Mark Zuckerberg.

Tesla CEO Elon Musk said in June that UBI will become “necessary” if automation makes human workers in some industries obsolete.

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.

The OECD also warned that UBI could, in fact, raise Finland’s poverty rate from 11.4 percent to 14.1 percent.

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