Finland's trial of basic income

Currently 2,000 unemployed Finns are receiving a flat monthly payment of €560 (£490; $685) as basic income. Some see basic income as a way to get unemployed people into temporary jobs. The argument is that, if paid universally, basic income would provide a guaranteed safety net. That would help to address insecurities associated with the "gig" economy, where workers do not have staff contracts. Supporters say basic income would boost mobility in the labour market as people would still have an income between jobs.

Finland's two-year pilot scheme started in January 2017, making it the first European country to test an unconditional basic income. The 2,000 participants - all unemployed - were chosen randomly. But it will not be extended after this year, as the government is now examining other schemes for reforming the Finnish social security system. The pilot's full results will not be released until late 2019.

IIRC, UBI has to be really universal for it to work, otherwise recipients tend to see it as a demeaning charity handout. 2,000 people is surely not enough to capture this effect, though I would imagine 2 years is long enough to see some influence. Unfortunately the article doesn't say anything about what's been see so far.

More interesting are the alternative options under consideration. Also, as Sakari Maaranen points out, Finland already has a functioning welfare system and ranks as one of the happiest countries anywhere, so this test case would have unique factors to consider. I would also point out that the Czech Republic has close to full employment, but another term for this is labour shortage. There's no competition for jobs because everyone already has one so feels less incentive to change, and it's hard to find new, better people for roles that are already taken - the pool of availability is very small. A certain amount of temporary unemployment, in which people are comfortably supported by the state (or indeed by any other means) with a near certainty of finding a new job after some short period, is perfectly healthy. It's chronic unemployment and its grinding poverty that are problematic.

In February this year the influential OECD think tank said a universal credit system, like that being introduced in the UK, would work better than a basic income in Finland. Universal credit replaces several benefit payments with a single monthly sum.

Let's not forget to mention that while universal credit is a fine thing in principle, in the UK it's being implemented really, really badly.

The study by the Organisation for Economic Co-operation and Development said income tax would have to increase by nearly 30% to fund a basic income. It also argued that basic income would increase income inequality and raise Finland's poverty rate from 11.4% to 14.1%. In contrast, the OECD said, universal credit would cut the poverty rate to 9.7%, as well as reduce complexity in the benefits system.

Another reform option being considered by Finnish politicians is a negative income tax, Prof Kangas said. Under that scheme, people whose income fell below a certain threshold would be exempt from income tax and would actually receive payments from the tax office.

http://www.bbc.com/news/world-europe-43866700