by Kate McFarland | Apr 5, 2016 | News
Kela, the Social Insurance Institution of Finland, released its preliminary report on a universal basic income on March 30th.
The report details several models of a basic income — including a full unconditional basic income, which would replace existing benefits, a partial basic income, and a negative income tax, among others.
After examining these options, the working group recommends that Finland adopt a partial basic income model for its impending experiments. According to the report, this model would “consolidate many of the existing benefits offering basic economic security, while earnings-related benefits would remain largely unaffected.” The group further recommends that a combination of national and regional samples be used in the trials.
The complete report, in Finnish, is accessible from Kela’s website. A summary is available below:
Suitability of different basic income models for the experiment
The preliminary report looks at a full-fledged unconditional basic income model, a partial basic income model, a negative income tax model as well as possible other models in terms of their suitability for the experiment. An unconditional basic income would take the place of much of the currently existing system of social provision, where eligibility for benefits is tied to specific contingencies. The basic income would therefore have to be substantial, which would make the model quite expensive. A partial basic income model would consolidate many of the existing benefits offering basic economic security, while earnings-related benefits would remain largely unaffected. To study incentive effects, simulations on a partial basic income model are run at a range of different replacement rates and levels of housing costs.
Both nationwide and regional samples
The working group proposes that a two-pronged sampling approach should be used in the actual experiment, consisting of a randomised nationwide sample and a regional, and more intensive, sample to study externalities. A weighted sample can be produced of population groups that are particularly relevant to the experiment. There are a number of constitutional and other legal problems associated with the design of the experiment, which the report examines extensively.
According to the report, a universal basic income would eliminate some bureaucratic roadblocks and gaps in coverage, but would not by itself solve all problems related to disincentives. The elimination of disincentives requires reforms in several different areas of social and tax policy. One problematic group in terms of social policy consists of single parents, particularly those paying a high rent and living in the greater Helsinki area. It is difficult to eliminate the disincentives they face without a wholesale readjustment of the social security system. Lowering the minimum level of welfare provision would be an easy way to produce better incentive outcomes. However, doing so would increase poverty and create more financial hardship.
Partial basic income as starting point
The report points out that trying out a negative income tax would require access to a comprehensive registry of incomes. Studies in the United States show that experiments with self-reported data do not produce reliable results. A basic income model strongly based on conditional reciprocity runs into problems of supervision and control, i.e., how to define the level of participation required by reciprocity and who will supervise and document that the requirements are met. Such an experiment would necessarily be of limited scope.
The working group believes that consolidation of the current system of basic economic security into a partial basic income would produce valuable results. Since a universal basic income and a negative income tax are, from the individual’s perspective, functionally equivalent, trying out a partial basic income would generate useful information also about the negative income tax. Such an experiment could be implemented without a registry of incomes by leveraging the existing welfare payments system operated by the Social Insurance Institution. Since it would also be possible to use the welfare benefits provided by the Social Insurance Institution as a basis for the experiment, the sample size could be increased substantially, which would make the results more reliable and make it possible to focus on specific population groups.
The Finnish government will now decide, based on the report, how to design the experiments, and what new legislation will necessary. Kela’s working group will release its final report on basic income on November 15th.
Finland announced its plans to test a basic income last November, to resounding international publicity. For more information, see the following Basic Income News reports:
Stanislas Jourdan, “FINLAND: Government Forms Research Team to Design Basic Income Pilots,” 15 October 2015.
Vito Laterza, “FINLAND: Basic income experiment – what we know,” 9 December 2015.
Tyler Prochazka, “Dylan Matthews, ‘Finland’s hugely exciting experiment in basic income, explained,” 13 December 2015.
Thanks, as always, to my supporters on Patreon.
by Karl Widerquist | Apr 3, 2016 | News
A seminar, entitled “Basic income in a global world: Seminar” will take place on 13 April 2016, from 12:00 to 16:00 in Kelan päätalon auditorio, Nordenskiöldinkatu 12, Helsinki tai video.
This seminar looks at prospects for a basic income in a global environment. What challenges do EU legislation and a globalised labour market present for the basic income? The seminar features lectures in English by Professor Guy Standing of the University of London and Jurgen de Wispelaere, a research fellow at the University of Tampere. It will also be broadcast live over the internet.
The event takes place in conjunction with Kela, which is beginning research to conduct a basic income pilot project in Finland.
To read more about it in Finnish go to this link.
To watch the video broadcast in English and Finnish, go to this link.
by Joe Timothy | Apr 1, 2016 | News
Over the last 12 months, the debate around basic income has seemingly gained interest by the week. Nations throughout the world — including Finland, Switzerland, France and Holland, among others — are currently exploring this policy as a solution to a plethora of different problems, in some cases even planning full-blown pilot studies. Recently, Canada has joined this list of nations ready to test a basic income. In 2016, since the election of the liberal Justin Trudeau, news has been streaming out of Canada about the adoption of basic income initiatives in various regions of the country — so many that we have decided to helpfully summarise the key news stories for you to consume in one go.
First, in the last few weeks, there has been a mountain of articles about the proposed implementation of a pilot study of basic income in Ontario, Canada. The idea of working towards developing a pilot study was announced in the 2016 budget statement. Few details were released at the time. It was stated that “the government will work with communities, researchers and other stakeholders” to develop a project into basic income. The statement also said that “The pilot project will test a growing view at home and abroad that a basic income could build on the success of minimum wage policies and increases in child benefits by providing more consistent and predictable support in the context of today’s dynamic labour market.”
A strategy to reduce poverty and expand the safety net
This push in Ontario towards a basic income is part of a larger strategy “to reduce poverty and expand the safety net”. Accompanying this initiative is a plan to give free university places to low income students. The Ontario government is also concerned with the precarious nature of the modern job market. They stated that there is a growing need for “consistent and predictable” support for working people. Ben Schiller, in Co.exist, wrote that “In Canada, temporary and part-time employment grew twice as fast as full-time work between 1997 and 2015.” It is within this environment that the Ontario government feel a basic income could be a good solution to help their communities.
In addition to the initiative in Ontario, it has also been noted that François Blais has been appointed as the minister of employment and social solidarity in the province of Quebec. Blais’ long term support for basic income has lead to speculation that Quebec may follow Ontario’s lead and look into adopting it as a policy. Schiller also pointed out that this idea has already received support, “Quebec Prime Minister Philippe Couillard says a basic income could simplify the welfare system and encourage work among benefit claimants.”
With the well known Manitoba trails of Minicome (a variant on basic income) in 1970’s, Canada is already an integral part of the history of basic income. However, when the Minicome program was cancelled, its results were filed away, and little was done over the following decades to try to understand the value of such a policy. But now, with the upsurge in interest in the last few years, we find Canada at the forefront of the basic income movement yet again. It is going to be fascinating to watch what comes out of this country over the coming months and see if this time a basic income is here to stay.
Olivia Goldhill, “Ontario, Canada announced a plan to test Universal Basic Income for all citizens”, Quartz, March 8th, 2016
Shane Ferro, “Canada Is About To Start Giving Away Free Money”, The Huffington Post, March 9th, 2016
Jack Smith IV, “Canada Will Experiment With Basic Income — Giving Out Salaries Just for Being Human”, Tech.Mic, March 7th, 2016
Ben Schiller, “Ontario Is The Latest Place To Test A Basic-Income Guarantee”, Co.Exist, March 2nd, 2016
Ashley Cowburn, “Canadian province Ontario plans to trial universal basic income”, The Independent, March 7th, 2016
Chris Weller, “Canada plans to experiment with giving people unconditional free money”, Tech Insider, March 4th, 2016
by Andre Coelho | Apr 1, 2016 | News
Andrew Little at WelTec. Credit to: Stuff.co.nz.
Following the lead of countries like Finland, Netherlands and Canada, New Zealand is now making its first steps towards a basic income. In a recent Stuff news article, Andrew Little, leader of the Labour Party, the second largest party in the New Zealand’s parliament, says Labour is considering a basic income. This interest is mainly motivated by the rise in structural unemployment, which guarantees profound changes in how New Zealanders work. Automation and precariousness of employment, self-employment and new business models are all affecting the way people work, and these structural changes occupy a central place in present day Labour Party concerns.
Indeed, the Party made these concerns – as well as the possibility of a basic income to address them – central to its Labour’s Future of Work Conference, which took place earlier this week, on the 23rd and 24th of March. The Future of Work Commission has released two background papers on universal basic income, one of which can be found here. This paper, by researchers Max Harries and Sebastiaan Bierema, analyses basic income in general and in the New Zealand context, also mentioning that a pilot programme could be an important first step into a future fully-fledged basic income implementation.
What Labour Party leaders in New Zealand will do, it’s hard to say. However, Keith Rankin, a New Zealander author who has written about basic income, highlights some possibilities in a recent article. These possibilities are similar to other basic income tax reform ideas presented, based on income tax redistribution. Keith proposes taxing income from both labour (work wages) and land (property) at a rate between 33 and 37%, and redistributing that money to all adult residents.
More information at:
Blake Caryton-Brown, “Labour leader Andrew Little promises debate on universal basic income”, Stuff.co.nz Politics, March 14th 2016
Chris Weller, “New Zealand is debating a plan to give people unconditional free money”, Tech Insider, March 14th 2016
Keith Rankin, “Universal Basic Income and income tax reform”, Briefing Papers, March 22nd 2016
André Coelho, “Miguel Horta: “Negative Income Tax in Portugal [Negative Income Tax em Portugal]””, Basic Income News, June 3rd 2015
New Zealand Labour Party, “The Future of Work” website.
Max Harris and Sebastiaan Bierema, 2016, “A Universal Basic Income for New Zealand”, Proceedings of the Conference The Future of Work, New Zealand
by Josh Martin | Mar 12, 2016 | Research
Abstract:
Following the success of a recent Swiss Citizens’ Initiative to grant each citizen an unconditional income guarantee and the Finnish Government’s plans to conduct the first national pilot project, the idea of a basic income as a citizens’ right has gained much prominence in the policy debate. This article reviews a number of policy developments on the ground through the lens of the policy transfer literature. In the absence of a fully developed basic income in place, proponents must rely on partially implemented schemes or proposals that differ in crucial respects from the basic income ideal. This paper outlines three sets of empirical cases and analyses what (if any) lessons we can draw from them regarding the future of basic income schemes.
Jurgen De Wispelaere, “Basic Income in Our Time: Improving Political Prospects Through Policy Learning”, Journal of Social Policy, Cambridge University Press 2016.
