Finland launched an experiment giving2,000 people free money until 2019

Finland has an ambitious New Year’s resolution in mind: learn how offeringfree money for two years helps the unemployed get back to work.Starting January 1, 2017 and lasting until 2019, the federal social security institution Kela will distribute roughly $590 each month to 2,000 jobless Finns.Regardless of whether they find work during that period, the money will keep coming in at the beginning of each month — a trial version of basic income, one of the past year’s most popular theories of how to solve poverty.Under universal basic income (UBI), peoplereceive a standard amount of money just for being alive. By handing out the money to everyone, regardless of their income status, UBI advocates say the system prevents people from falling through the cracks.Marjukka Turunen, head of Kela’s legal benefits unit, says the experiment in Finland should provide insights on two fronts.The first is whether basic income could help clean up Finland’s messy system of social security. Depending on their specificneeds, Turunen says residents could be onone of 40 different benefit systems. Each benefit — whether it’s for someone who’s sick, unemployed, a student, or so on— is calculated differently and must be changedwhen the person’s status changes.“That’s really a burden for customers and Kela to do all those status changes,” Turunen tells Business Insider. A form of basic income could mean people just needto apply for one status indefinitely, no changes required.The experiment will also provide clues about how people behave when they’re receiving free money. Skeptics say people will sit on their couch all day. Proponents claim they’ll actually use the money to make their lives better. (Limited evidence from developing countries suggests it’s more of the latter.)Turunen suspects the experiment will compel at least a few wannabe entrepreneurs to make the leap into starting their own business — a risky proposition in Finland today since business owners who are forced to close shop don’t receive unemployment benefits.It’s not unlike the system in place in most US states.“The system nowadays, it’s pretty negative for people who try to do something — even little — in their lives and get something out of it,” she says.A basic income might turn a risky move into a much safer one.Turunen doesn’t expect the trial to lead to larger basic income studies in Finland. Thecurrent experiment is tax-free, and in a small country like Finland the cost would be too great.But other long-term experiments are picking up the slack. Basic income is part of government conversations in Canada, India, and the Netherlands. A pilot project run by the Silicon Valley firm Y Combinator is soon launching in Oakland, California, and the charity GiveDirectly has launched amassive 12-year study in Kenya.Turunen, for her part, expects basic income to continue gaining in popularity if the data from those experiments keeps coming back positive.“Some people might stay on their couches, and some might go to work,” she says. “Wedon’t know yet.”


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s