What is the basic income experiment and what is its aim?
The basic income experiment is part of the key project ‘Services to be based on customer needs’ of Prime Minister Juha Sipilä’s Government. The experiment is one of the activities aiming to reform social security so that it better encourages employment.
Why is the basic income experiment carried out?
The basic income experiment is carried out to assess whether basic income can be used to reform social security in a way that reduces incentive traps relating to working.
The current social security system has been developed for decades but its basis was structured in a very different environment from the one we have now. Atypical employment relationships have become more common and all parts of our social security system do not anymore respond to today's needs.
How are the participants selected?
2000 persons were selected to participate in the experiment. They were selected by means of random sampling from a target group of people aged between 25 and 58 who were receiving basic unemployment allowance or labour market support from Kela (the Social Insurance Institution of Finland).
Is it mandatory to participate in the experiment?
Participation in the experiment is mandatory for those selected. The persons selected cannot refuse to participate because the results of follow-up studies would be distorted.
Will Kela disclose contact information of the persons participating in the experiment?
Kela will not disclose any data on the institution's clients to media, researchers or other parties if legislation does not specifically give them that right or oblige them to do so. From Kela's viewpoint, basic income is just one benefit among all benefits paid out by Kela.
When will the experiment start?
The experiment started in January 2017 and it will continue until the end of year 2018.
What is the level of basic income in the experiment?
The level of basic income is EUR 560 per month. Basic income is a tax free benefit for the receivers.
How is the experiment financed?
A total of EUR 20 million has been reserved in the budget for the basic income experiment. In addition to this, the benefits that Kela is paying at the moment would be used as an addition for those persons who are receiving basic security benefits at the beginning of the experiment.
Who is responsible for carrying out the experiment?
The Social Insurance Institution of Finland (Kela) would be responsible for carrying out the experiment.
When will the experiment produce results?
Information about the results of the first year of the experiment will be available in early 2019. A register-based overall study of the experiment should be completed one year later. Kela is responsible for organising research on the basic income experiment and they can use help from the VATT Institute for Economic Research and from other partners when carrying out the research project.