Finland Experiments A Basic Income Programme For Unemployed

Finland Experiments A Basic Income Programme For Unemployed
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Finland has become the first country in Europe to pay a basic income to randomly picked citizens on a national level in an experiment aiming at dismissing poverty, motivate people to join work force and decrease unemployment.

The two-year, nationwide pilot scheme will be conducted with 2,000 randomly picked unemployed participants between the ages of 25 and 58. For two years, participants from different parts of the country will receive an unconditional monthly tax-free basic income of 560 euros ($586).

The plan aims to find ways to reshape the social security system in response to changes in the labour market, according to the website of the Social Insurance Institution or Kela, which manages the project. It also seeks to reduce the bureaucracy and simplify the complicated benefits system, Kela says.

The scheme, which was launched on January 1, hopes to create an incentive for more Finns to work, since the fear of losing welfare benefits make many citizens act picky about the job they would accept.

Many Finns stay out of the job market for years as they do not want to lose their welfare benefits.

“For someone receiving a basic income, there are no repercussions if they work a few days or a couple of weeks,” said Marjukka Turunen, of Kela’s legal affairs unit. “Working and self-employment are worthwhile no matter what.”

Professor Olli Kangas from Kela says that there are many incentive traps in the present system that are caused by a number of income-tested benefits paid on top of each other.

“In the current system with many strictly income-tested benefits, people may end up in situations where work does not pay enough, making them reluctant to get back to the job market with short-term or low-income jobs” he told Al Jazeera.

“There is also the bureaucratic hassle that makes people afraid to take short-term jobs. They are afraid that they might not be able to claim again their benefits after their contract is terminated and their employment is over.”

Kangas said that the participants will be monitored on to what extent, if any, they will change their labour market behavior when they get unconditional income: Will they stay unemployed or use it as an incentive to start working?

There are strong arguments but less evidence, we hope that we can contribute to evidence-based policy making, he added.

source: Agencies

 

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