As previously reported in Basic Income News, Finland’s first international basic income seminar (BIST2016) was held in Turku on August 25. BIST2016 was organized by Varsinais-Suomen Piraatit (Southwest Finnish Pirates) in collaboration with BIEN Finland, the Pirate Party of Finland, and Pirate Youth of Finland.
Videos of the some of the lectures are available on YouTube, and copied below.
Ville-Veikko Pulkka: “Notes on the Finnish basic income experiment”
Summary:
In autumn 2015, the Prime Minister’s Office invited bids for a preliminary study (published on 30 March 2016) as part of preparations for a basic income experiment. After evaluation, a consortium led by the Finnish Social Insurance Institution, Kela, was appointed to study the suitability of different basic income models for the experiment.
The assignment outlined four different options to explore and develop:
1) full basic income (the level of BI high enough to replace almost all other benefits, perhaps excluding earnings-related benefits)
2) partial basic income (would replace most of the basic security benefits, but leave some)
3) negative income tax (“basic income” via taxation)
4) other possibilities to test basic income (the research group analysed participation income and the British Universal Credit, but these systems would not enable one to test the effects of basic income due to their conditionality).
Even though a budget-neutral partial basic income cannot automatically diminish income and unemployment traps, the model appears to be both economically and politically the most feasible one to test. According to power calculations made by the economists in our group, the sample for the experiment should be approximately 10,000 people in order to observe statistically significant results if the employment rate changes by two percentage points. In an ideal setting, the randomisation of people is compulsory and two-pronged. In addition to the treatment group, there must naturally be a control group.
The crucial factor is to have at least nationwide randomization since local experiments do not produce generalizable results. A representative, nationwide randomisation can be combined with more intensive local experiments to capture externalities. Also, weighted samples of interesting special groups are possible if the budget constraints can be tackled. Our research group recommends focusing on low-income households since the elasticity of labour supply is supposed to be greatest among this group and the budget is limited.
Ville-Veikko Pulkka is a researcher at Kela, the Finnish Social Insurance Institution, where he is a member of the research group that is preparing the country’s basic income experiment. Additionally, Pulkka is a PhD candidate at the University of Helsinki, writing a dissertation on “digital working life”.
Photo by Toru Yamamori
Christian Engström: “Basic income: a concrete and calculated proposal”
Summary:
This talk introduces a concrete proposal for a basic income system for Sweden, including a cost estimate and financing. The basic income would be 8.333 SEK (900 EUR) per month for anybody between 19 and 65 who lives in Sweden and has no other income. When you start earning money the basic income would be reduced, but never by 100%, so there is always an incentive to work if you can. The cost of this system would be covered in full by letting the basic income replace the current systems for social welfare, student aid and unemployment benefits, and removing the VAT discounts that certain industries enjoy. To make the proposal politically realistic, there would be no increase of income taxes, and no reduction of current sickness benefits.
Christian Engström is a member of the Swedish Pirate Party and, from 2009 to 2014, was a Member of the European Parliament.
Photo by Toru Yamamori
Albert Svan: “Basic income possibilities – based on informal studies from Iceland”
Summary:
In Iceland the Pirate Party is preparing a policy for implementing a basic income scheme. The debate started a couple of years ago when congressman Halldóra Mogensen proposed a legislation on basic income at the Icelandic Parliament. Some preliminary calculations show that 1/3 of the Icelandic government budget already goes to direct money transfers to Icelandic individuals and that a modest basic income amount for all persons 18+ years old will cost 2/3 of the budget, while a negative income tax may cost a similar amount as the current social financial aid. Of many prerequisites one initial observation is that basic income criteria should be calculated regularly and that a legislation of lowest allowed salaries must be somewhat higher than the basic income criteria.
Albert S. Sigurdsson currently works for Statistics Iceland. He holds a master’s degree in geography from the University of Helsinki, and has previously worked at the Finnish Environment Institute, Iceland’s Environment Agency, Lionbridge Technologies, and Futuvision Media.
Reviewed by Genevieve Shanahan
Turku photo CC BY-NC 2.0 Mikael Korhonen
The Finns are doing a great job. I like the budget-friendly aspect of an individualized NIT or tapering minimum income which avoids the financial friction of tax claw-backs. That said, Basic Income is not defined by standard classification frameworks. This hinders meaningful dialogue, as well as setting expectations and analyzing outcomes to be rated and ranked. Even with my [feeble framework], the four experiments, above, can raise as many questions as answers. For example I like this preference for the USA:
2.3.1.2.2.1 framework (poverty-level, citizen income, age 18-64, tapering minimum income, non-inflationary, excludes medical goods & services). Given this framework, separate provisions for orphans and foster children would be handled by nurseries and boarding schools. Medical goods & services for all citizens would need to be provided as public/private funded health insurance to all citizens. I also like this particular model because it lends itself to my preferred tax reform, namely Edgar Feige’s APT tax that would eliminate the marginal tax rate effect on income drawback. This plan also helps to allay my concerns about subsidizing unsustainable population growth. Frameworks 4.1 and 4.2 seem to be subsidiary options that can be included or kept independent.
Do you see what I mean? Each country and citizen’s preferences will be slightly different, but there is a lot of overlapping information to be collected that can be shared, collaboratively, to save time and money if the data and definitions are organized and presented in an open-ended common schema to a lay audience. That would help collegial-minded researchers and serve as inputs to policy makers, budget experts, tax reformers, educators, health professionals, basic income supporters, etc., to build consensus and provide a more coherent picture to the public , i.e. voters and politicians that represent pubic/private investment in the project.
[Feeble Framework]
1: Cadillac Basic Income (greater than relative poverty level)
2: Full Basic Income (relative poverty level)
3: Partial Basic income (less than relative poverty level )
X.1 Universal income for everybody
X.2 Permanent Resident Income (skewed for permanent residents)
X.3 Citizen Income (skewed for citizens)
X.X.1: Working-Age Basic Income for age 18-64 (skewed for higher-benefit Social Security recipients)
X.X.2 Individual Basic income (for all adults)
X.X.3: Family Basic Income (skewed for single mothers and large families)
X.X.X.1: Permanent Basic Income (Tax clawback minimum income)
X.X.X.2: Tapering Basic Income (Hazlitt version or Friedman negative income tax)
X.X.X.X.1 Inflationary basic Income (Funded by money printing)
X.X.X.X.2 Non-Inflationary Basic Income (Funded by taxation)
X.X.X.X.X.1 Includes cost of Medical Goods & Services
X.X.X.X.X.1 Excludes cost of Medical Goods & Services
4.1: GDP-Growth Social Dividend (Milner, Douglas)
4.2: Natural-Resource Citizen’s Dividend (Georgist/Thomas Paine)