Basic income experiment

Published 16.9.2020Edited 6.3.2023

A basic income experiment was conducted in Finland in 2017–2018. During the experiment, a total of 2,000 unemployed persons between 25 and 58 years of age received a monthly payment of €560, unconditionally and without means testing.

Results of the basic income experiment: small employment effects, better perceived economic security and mental wellbeing

The evaluation study of the basic income experiment is now available. The register data on employment now cover both years of the experiment and a more thorough analysis has been made of the results of the survey. In addition, the interview-based survey of basic income recipients complements the overall picture.

The employment effects of the basic income experiment were measured for the period from November 2017 to October 2018. The employment rate for basic income recipients improved slightly more during this period than for the control group. However, the interpretation of the effects of the experiment is made more complicated by the introduction of the activation model at the beginning of 2018, which meant more stringent entitlement criteria for unemployment benefits asymmetrically in both groups.

During the first year of the experiment, when the activation model had not yet been introduced, the basic income did not have any employment effects for the basic income recipients at group level. All in all, the employment effects were small.

The effects of the basic income experiment on wellbeing were studied through a survey. Survey respondents who received a basic income described their wellbeing more positively than respondents in the control group. They were more satisfied with their lives and experienced less mental strain, depression, sadness and loneliness. They also had a more positive perception of their cognitive abilities, i.e. memory, learning and ability to concentrate. In addition, the respondents who received a basic income had a more positive perception of their income and economic wellbeing than the control group.

A total of 81 basic income recipients were also interviewed for the study. The interviews highlight the diverse effects of the experiment and the differences in the starting points and life situations of the basic income recipients.

Preliminary results: perception of improved wellbeing, during the first year no effects on employment

The first, preliminary results on the basic income experiment evaluation study were published on 8 February 2019.

The basic income experiment did not increase the employment level of the participants in the first year of the experiment. Based on an analysis of register data, recipients of a basic income were no better or worse than the control group in finding employment during the first year of the experiment . The register data are ready with a one year delay, which means that the results for the second year of the experiment will be published at the beginning of 2020.

The survey found that the recipients of a basic income perceived their wellbeing at the end of the experiment as being better than the control group. Recipients had fewer stress symptoms, fewer difficulties concentrating and fewer health problems than the control group. They were also more confident in their future and in their ability to influence societal issues.

The first results are to some extent preliminary, and it is not yet possible to draw any firm conclusions of the effects of the basic income experiment. Results will be published in a series of articles during 2019 and 2020.

Evaluation study of the basic income experiment

The analysis included both a register-based study and a phone survey among members of the experiment group and the control group. Results for the entire experiment became available in spring 2020. A research report on the first year of the experiment was completed in spring 2019.

The main goal was to help understand how receiving a basic income affects the income and employment status of the participants. The impact of the basic income on the participants’ general well-being was also investigated.

Kela was responsible for the organisation of the research as a whole and conducted the research in cooperation with the VATT Institute for Economic Research and other cooperation partners.

he studying of the effects of the basic income experiment continues in cooperation between Kela’s Research Unit and the VATT Institute for Economic Research. The continued research projects concern the target population’s employment status, use of employment services, income, use of social security benefits and health. The research focuses on research variables that have not previously been reported, such as health and use of healthcare services as well as the long-term effects of the experiment.

The research materials of the continued projects are mainly based on administrative registers.

A two-year experiment

The Government of Prime Minister Juha Sipilä trialled a guaranteed basic income in Finland during 2017 and 2018. A working group of researchers from a range of organisations under the project leadership of Kela explored ways in which to carry out the basic income experiment. Legislation was enacted concerning the experiment, and Kela was responsible for the practical implementation of the experiment and for the payment of the basic income. Kela is also responsible for carrying out an evaluation study on the results of the experiment.

The basic income experiment was launched on 1 January 2017. The experiment ran for two years and ended on 31 December 2018.

The purpose of the basic income experiment was to find ways to reshape the social security system in response to changes in the labour market. The experiment also explored how to make the system more empowering and more effective in terms of providing incentives for work. Further objectives included the reduction of bureaucracy and the streamlining the complicated system for providing welfare benefits

Additional information about the Finnish basic income experiment

Kari Hämäläinen, Miska Simanainen & Jouko Verho: Health effects of cash transfers: Evidence from the Finnish basic income experiment
Antti Halmetoja, Paula Saikkonen & Miska Simanainen: Sosiaaliturva ja vastikkeellisuus. Tapaustutkimus Suomen perustulokokeilusta
Kari Hämäläinen & Jouko Verho: Design and Evaluation of the Finnish Basic Income Experiment
Kari Hämäläinen & Jouko Verho: Design and Evaluation of the Finnish Basic Income Experiment (Working Paper)
Jouko Verho, Kari Hämäläinen & Ohto Kanninen: Removing Welfare Traps: Employment Responses in the Finnish Basic Income Experiment
Olli Kangas, Signe Jauhiainen, Miska Simanainen & Minna Ylikännö (Eds). Experimenting with Unconditional Basic Income. Lessons from the Finnish BI Experiment 2017-2018. (Opens in a new tab)Edward Elgar Publishing 2021.
Jouko Verho, Kari Hämäläinen & Ohto Kanninen: Removing Welfare Traps: Employment Responses in the Finnish Basic Income Experiment(Opens in a new tab) (Working Paper)
Miska Simanainen: Perustulo ja mielenterveys
Miska Simanainen & Olli Kangas: Speaking to Those Who Know It Best: Does Participation in an Experiment Explain Citizens’ Attitudes to Basic Income?
Kari Hämäläinen, Ohto Kanninen, Miska Simanainen & Jouko Verho: Perustulokokeilun arvioinnin loppuraportti: Rekisterianalyysi työmarkkinavaikutuksista(Opens in a new tab)
Miska Simanainen & Olli Kangas: What experiments in Finland can tell us about basic income(Opens in a new tab)
Olli Kangas, Miska Simanainen & Pertti Honkanen: Basic Income in the Finnish Context (pdf)(Opens in a new tab)
Pertti Koistinen ym.: Perustulon työllisyysvaikutukset. Asiantuntijahaastatteluihin ja verrannollisiin esimerkkeihin perustuva arvio.(Opens in a new tab)
Mikko Forss ym.: Mitä voimme oppia maailmalla järjestetyistä perusturvaan liittyvistä kokeista? Katsaus kenttäkoeasetelmiin.(Opens in a new tab)
Jurgen De Wispelaere: Jokaisen oma tulo? Universaalin perustulon poliittinen analyysi.(Opens in a new tab)
Johanna Perkiö: Suomalainen perustulokeskustelu ja mallit.(Opens in a new tab)

The purpose of the preliminary study on the basic income experiment was to analyse various models that could be used as a basis for implementing the experiment.

Launched at the end of October 2015, the preliminary study was carried out by a research team led by Kela. The team submitted its preliminary report to the Minister of Social Affairs and Health on 30 March 2016. The Government of Juha Sipilä then prepared a bill on the basic income experiment which was passed by Parliament in December 2016.

The research group presented its final report to the Minister of Social Affairs and Health on 16 December 2016. The basic income experiment was launched on 1 January 2017.

In its interim report, the preliminary analysis study group looked at alternative basic income models

The research team presented its preliminary report to Hanna Mäntylä, Minister of Social Affairs and Health, on 30 March 2016.

The report brings together information about different basic income models and about the results of experiments in which such models have been tried out. It also estimates the effects that different basic income models could have.

Report: From idea to experiment – Report on universal basic income experiment in Finland (PDF)(Opens in a new tab)
Video recording of the formal presentation of the report(Opens in a new tab)
Materials from the formal presentation of the report(Opens in a new tab)
Association of Finnish Local and Regional Authorities: Perustulo voi mullistaa kuntien talouden ja palvelut(Opens in a new tab) (Basic income could bring about a transformation in municipal financing and services)

The final report on the preliminary analysis recommended an expanded experiment

The research group submitted its final report on 16 December 2016 to Pirkko Mattila, Ministry of Social Affairs and Health.

The group recommends expanding the basic income experiment in 2018. The sample size should be increased, and other low-income individuals besides the unemployed should be included.

Report: From idea to experiments - Final report on alternatives for implementing a basic income experiment(Opens in a new tab) (in Finnish)

Members on the research group

The preliminary report was drawn up by

Kela's research organisation
University of Helsinki
University of Tampere
University of Eastern Finland
University of Turku
Sitra Innovation Fund
Policy institute Tänk
VATT Institute for Economic Research.

The Federation of Finnish Entrepreneurs and experts on municipal affairs, tax law and constitutional matters also contributed to the project. The project was headed by Professor Olli Kangas, former director of government and community relations at Kela and now at the University of Turku.

It was carried out as part of the Government's analysis and research plan for 2015.

A total of 2,000 persons will be randomly sampled as participants of the basic income experiment, which is set to begin at the start of 2017. Included in the sampling are all persons between 25 and 58 whom Kela paid labour market subsidy or basic unemployment allowance in November 2016 for some other reason than a temporary layoff.

Anyone selected for the experiment may not be in receipt of a benefit (such as a pension) precluding the payment of the basic income, or be disqualified on some other grounds specified in the law.

Random sampling means that all who satisfy the requirements for inclusion in the experiment have an equal probability of being selected into the study population.

The Government bill concerning the basic income experiment is currently undergoing parliamentary review. The launch of the experiment is conditional on parliamentary approval and confirmation by the President.

In accordance with the Government’s proposal, Kela is publishing on this page the sampling algorithm used to draw the random sample in December 2016.

Sampling algorithm

* Otetaan siemenluku otoksen tekoa varten koneajasta ;
data _NULL_;
siemen= int(%sysfunc(TIME())) ;
call symput('siemen',siemen);
run;
%put &siemen;

* Järjestetään perusjoukko ;
proc sort data=perus;
by henro;
run;
* Tehdään otos, n=2000 ;
proc surveyselect data=perus method=srs
n=2000 seed=&siemen
out=otos;
run;
* Järjestetään otos ;
proc sort data=otos;
by henro;
run;

* Yhdistetään otos perusjoukkoon, tehdään muuttuja TYYPPI;
data kaikki;
merge perus(in=a)
otos(in=b);
by henro;
length TYYPPI $ 1.;
if a then TYYPPI='V'; * verrokit ;
if b then TYYPPI='K'; * kokeiluryhmä ;

* annetaan arvot muuttujalle REAOH ;
REAOH='PUOTOS';
run;

* Tarkistetaan, että 2000 henkilöllä TYYPPI saa arvon 'K' ;
proc freq;
tables tyyppi;
run;

Objectives of the Basic Income Experiment

Finland conducted an experiment testing a basic income in 2017-2018. The experiment was implemented by Kela, the Social Insurance Institution of Finland.

The basic income is a form of social security in which all citizens receive a regular, unconditional sum of money towards their expenses. It is intended to reduce the amount of work involved in seeking financial assistance and to free up time and resources for other activities such as working or seeking employment.

The basic income experiment seeks answers to the following questions:

How could the social security system be redesigned to address the changing nature of work?
Can the social security system be reshaped in a way that promotes active participation and gives people a stronger incentive to work?
Can bureaucracy be reduced and the complicated benefits system simplified?

Implementation of the basic income experiment

Because of the nature of the experiment, all Finnish citizens were not paid a basic income. The study population consisted of 2,000 persons selected at random in December 2016.

Included in the random sampling were all individuals between ages 25 and 58 whom Kela paid labour market subsidy or basic unemployment allowance in November 2016 for some other reason than a temporary layoff. Random sampling means that all who satisfied the requirements for inclusion in the experiment had an equal probability of being selected into the study population.

Those selected for the experiment could not turn it down because that would skew the results.

Basic income: Amount and payment

Those participating in the experiment got a basic income from 1 January 2017 until 31 December 2018. The basic income was paid out at a rate of €560 per month. Everyone included in the experiment received the same amount.

The amount of the basic income remained the same throughout the experiment, and it was not reduced by any other income the participant may have. Participants who found work during the experiment continued to be paid a basic income.

How basic income affected the other social security benefits

The experiment was designed in a way that ensured that no participant suffered negative financial consequences. Persons receiving a basic income could claim any benefits to which they were entitled as they normally would. An amount equal to the basic income was deducted from certain social security benefits paid to participants. The remaining amount was paid to the person receiving a basic income. For example if the net amount of unemployment benefits exceeded the amount paid as a basic income, the exceeding part was paid to the person applying for benefits.

Anyone receiving a basic income should remain registered with the Employment and Economic Development Office as an unemployed jobseeker and apply to Kela or their unemployment fund for unemployment benefits.

Taxation of the basic income

The basic income was exempt from tax. Because it was not included in taxable income, it had no consequences for the participants' taxation. The benefits from which the basic income was deducted were for tax purposes treated as if they were paid without the deduction for the basic income.

The basic income experiment resulted in register material and, in addition, survey data were gathered in the evaluation project. The materials may be obtained for research purposes.

Basic income register

The basic income register can be obtained for research purposes as ready-made research data from Statistics Finland’s FionaA remote access system. The data gathered in the register may only be used for research in connection with the basic income experiment.

The user of the material must apply for a research permit from Kela. When the permit has been granted, Statistics Finland provides access to the basic income register in the Fiona system.

The basic income register includes the target group of the basic income experiment, i.e. data on whether the person was included in the experiment group or the control group. The material also includes data on the periods for which basic income has been paid, basic income payments and set-offs.

The basic income register does not include other data on the person, for instance background data or data on employment. These data can be combined with the basic income register data from other materials of Statistics Finland. Permission to use these materials must be applied for with Statistics Finland.

Description of material in the Taika research data catalogue(Opens in a new tab) of Statistics Finland
Prices of ready-made research data and remote access use(Opens in a new tab)

How to apply for research permit for the basic income register from Kela

Research permit is applied for from Kela with an application form.(Opens in a new tab)

The following documents must be included with the application:

an updated research plan
a privacy statement
a publication plan
a confidentiality agreement(Opens in a new tab) signed by all who will have access to the data
invoicing details

No specification document is needed. State in the application that the application concerns research permit for ready-made material from the basic income register. The application documents must also show the materials that the basic income register data will be combined with.
Send the application and the enclosed documents to Kela electronically to the address tietoaineistot@kela.fi.

Instructions for applying for research permits and fee schedule for research data permits: Research data permits and data materials

Survey material of the basic income experiment

A survey on the basic income experiment was conducted in the experiment group and the control group in autumn 2018. The survey material is available from the Finnish Social Science Data Archive for research purposes, including Master’s theses and licentiate and doctoral dissertations.

Read more about the material and download the material.(Opens in a new tab)
After registration, the material can be downloaded from the Aila Data Service(Opens in a new tab).
Further information on the conducting of the survey is available in an appendix to the final report(Opens in a new tab).

Additional information about the materials is provided by

Signe Jauhiainen, Head of Research, tel. 050 331 3982, firstname.lastname@kela.fi
Miska Simanainen, Researcher, tel. 050 552 2095, firstname.lastname@kela.fi

Research Manager Signe Jauhiainen

Frequently asked questions about the basic income experiment

Finland conducted an experiment testing a basic income in 2017-2018. In the experiment, 2,000 randomly selected unemployed persons were paid a monthly basic income of 560 euros regardless of any other income they may have had or whether they were actively looking for work. The main goal of the study to evaluate the experiment is to help understand how receiving a basic income affects the income, wellbeing and employment status of the participants.

The current social security system, which has been gradually built up over many decades, was created under very different circumstances. Atypical work arrangements are now more common, and our social security system no longer meets modern requirements.

A guaranteed basic income could create more flexibility in allowing people to accept a job without losing their benefits. For this reason, Finland wanted to test a basic income.

The basic income experiment was launched by the Government of Prime Minister Juha Sipilä. The research group led by Kela studied alternative ways of implementing the experiment. Legislation was enacted concerning the experiment, and Kela was responsible for the practical implementation of the experiment and for the payment of the basic income.

The budget for the experiment was EUR 20 million.

The Finnish experiment differs from other experiments in that it covered the whole country and it was based on law. The experiment was carried out in the whole country, and participation was not voluntary.

The experiment was planned to last two years and it ended according to plan on 31 December 2018.

Currently there are no plans for new basic income experiments. The Government and Parliament will decide on the launching of possible future experiments.

The basic income experiment ended 31 December 2018, and the last basic income payments were made in December 2018. After the end of the experiment, the participants can claim other benefits from Kela that they may be entitled to. If a participant is fully or partially unemployed, he or she must register with TE Services as an unemployed jobseeker and claim an unemployment benefit from Kela.

A study group of 2,000 was selected by means of random sampling in December 2016. Included in the sampling were all persons between 25 and 58 whom Kela paid labour market subsidy or basic unemployment allowance in November 2016 for some other reason than a temporary layoff.

Anyone who was paid a basic income and who found work during the experiment could keep the basic income. Wages, salaries and income from self-employment did not affect the amount of the basic income. The basic income was also not affected by whether the recipient was working on a full-time or part-time basis.

Information about participants is stored in a register created by Kela for the experiment.

Information collected in the register is only used for administrative, statistical and research purposes relating specifically to the basic income experiment.

The following types of information are collected about the participants:

name
personal identity code
information about receiving labour market subsidy or basic unemployment allowance as of November 2016
information about the basic income paid
information about decisions issued by Kela.

Kela releases the names and personal identity codes of the persons included in the study group to the Tax Administration and to municipal authorities.

The register and survey materials can be obtained for research purposes. Read more about the use of the materials on this page.