by Kate McFarland | Aug 25, 2016 | News
Finland’s Ministry of Social Affairs and Health has drafted a bill proposing a basic income experiment to test the effects of unconditional cash payments on work incentives.
According to a press release dated August 25, the bill recommends that a basic income experiment be conducted in Finland from 2017-2018, under the guidance and direction of the Social Insurance Institution of Finland (Kela). This is consistent with previously announced plans [1].
Under the proposed experiment, Kela will provide a basic income of 560 EUR per month (equivalent to about 630 USD), exempt from taxation, to 2000 individuals who are currently receiving unemployment benefits. The sample will be randomly selected from a pool of current beneficiaries of unemployment-related aid. To prevent selection bias, participation in the basic income scheme will be mandatory for those selected.
A control group will also be drawn from this population; individuals in the control group will continue to receive their typical unemployment benefits.
According to the press release, the primary objective of the experiment is “to obtain information on the effects of basic income on the employment of persons”. In particular, the government is interested in determining whether basic income effectively reduces the incentive traps associated with means-tested benefits (e.g., unemployment benefits that are lost once the recipient finds a job). The government’s hope is that basic income will encourage more individuals to accept jobs.
Given the primary concern with employment effects, students and elderly persons are to be excluded from both the experimental and control groups.
Although the experiment is designed to test the effect of basic income on work incentives, the Finnish government is also interested in basic income as a way to “reduce bureaucracy” and to “simplify the complicated benefits system in a [financially] sustainable way”.
The amount of 560 EUR per month was chosen to ensure that no individuals would endure a net loss in support under the basic income trial. According to an article in Yle, “A full basic income that would replace existing earnings-related benefits would not be politically or economically feasible” [1].
Jurgen De Wispelaere, a basic income researcher at the University of Tampere, has provided the following commentary on the announcement:
The draft bill released today by the Ministry of Social Affairs and Health signifies a crucial next step in the development of the Finnish basic income experiment. We now not only have a clear commitment from Juha Sipilä’s government that they are proceeding with piloting the first nation-wide basic income scheme. The proposed legislation also clearly sets out the parameters of the proposed pilot scheme, which was the topic of quite a lot of speculation in the media. Assuming the bill is approved by the Finnish Parliament and it passes the scrutiny of the constitutional committee, Olli Kangas and his research consortium will spend the next months working out many practical issues to ensure the experiment can kick off as planned in 2017. For basic income advocates, however, continued engagement with key political stakeholders in Finland remains a must. This is merely the start of a political process towards a universal and unconditional basic income in Finland.
The Ministry of Social Affairs and Health will hear opinions on the proposed legislation until September 9. After this date, it will submit the proposal to Parliament. If passed, the act authorizing the experiment will go into force on January 1, 2017.
The official press release (in English) is available online:
Ministry of Social Affairs and Health, “Ministry of Social Affairs and Health requests opinions on a basic income experiment“, Sosiaali-Ja Terveysministeriö; August 25, 2016.
Olli Kangas, Research Director at Kela, has also written a blog post covering the announcement (in Finnish). In the post, Kangas explains that a partial basic income, as selected for the experiment, was the only feasible model given budgetary and time constraints.
“Kokeilulaki osittaisesta perustulosta lausunnoille“, Kela; August 25, 2016.
[1] See, for example, these previous Basic Income News stories:
Vito Laterza, “FINLAND: Basic income experiment – what we know” (December 9, 2015)
Will Wachtmeister, “FINLAND: The world’s first country with truly experimental governance” (December 18, 2015)
Kate McFarland, “FINLAND: KELA has sent preliminary report to Prime Minister” (April 5, 2016)
[2] “Basic income pilot takes shape – mandatory participation for 2,000 unemployed“, Yle; August 25, 2016.
Reviewed by Robert Gordon
Photo (“Three Smiths” statue in Helsinki) CC BY-SA 2.0 Rob Hurson
This basic income news made possible in part by Kate’s supporters on Patreon
by Kate McFarland | Aug 25, 2016 | News
Another course on basic income, “Universal Basic Income: New Avenues in Social Welfare Policy”, is coming this autumn to the School of Social Sciences and Humanities at the University of Tampere in Finland.
According to the course description:
The course outlines the main characteristics of basic income and explores how it differs from traditional income support policies. In addition, the course provides a critical overview of the reasons for and against a basic income as well as reviewing a number of practical and political challenges that need to be overcome. Finally, the course offers a series of lectures that focus on basic income in the Finnish context, including an updated account of the ongoing preparation for the basic income experiment scheduled to start in January 2017.
Antti Halmetoja, a doctoral student at the university, is coordinating the course, which will feature a series of lectures by faculty and guest lecturers (see the linked webpage for a list). Halmetoja is also a member of the team planning Finland’s basic income experiment.
The University of Tampere’s most recent course on basic income took place last spring. Presentations and videos of many of the lecturers are available on the course website.
The first basic income course at the institution was held in the spring of 2015.
More information about the upcoming course is available here.
University of Tampere photo CC BY-NC 2.0 Mika Hirsimäki
Reviewed by Genevieve Shanahan
This basic income news is made possible in part by Kate’s supporters on Patreon.
by Toru Yamamori | Aug 17, 2016 | News
Pirates of Southwestern Finland is hosting a workshop and seminar on Basic Income in Nordic countries, with the support of Basic Income Earth Network (BIEN) Finland, Pirate Party of Finland and Pirate Youth of Finland.
Time:
Thursday 25.8.2016, 14.00 – 18.00
Venue:
Vanha Raatihuone (Old City Hall)
Vanha Suurtori 3, Turku, Finland
At the workshop, BIEN Finland will facilitate four group discussions on the theme of ‘UBI for (enhancing of ) Nordic cooperation’, .
Confirmed speakers at the seminar are:
Ville-Veikko Pulkka, from The Social Insurance Institution
Albert Svan, Pirate Party of Iceland
Christian Engström, Pirate Party of Sweden
Jouko Hemmi, BIEN Finland
Tapani Karvinen, whom BIEN contacted about the event, told the Basic Income news team:
We hope that our seminar will broaden the basic income discussion by showing what’s happening at the moment in Nordic countries.
Iceland, Sweden and Finland are all having a serious thought about fixing social security, at least in part, by basic income. Leading countries will be first to see what to do and what not, so sharing that information without borders will bring the threshold lower in other states to consider basic income – which in turn, will accelerate the discussion further.
The detail can be found at:
https://varsinais-suomi.piraattipuolue.fi/basic-income-seminar-2016/
https://www.facebook.com/events/1009751985812851/
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.
