Universal basic income: Finland trials show mental health boost and rise in employment

Is it time we rolled out our own universal basic income trials in the UK?

Not that long ago, the idea of a universal basic income ‒ where the Government pays everyone a certain amount of cash, every month, irrespective of their financial circumstances ‒ would have seemed incredibly outlandish.

Yet a host of positive international trials, coupled with the experience of Covid-19, suggests that the case for universal basic income is stronger than many may have imagined.

Learning from Finland

The authorities in Finland have now published the results of their universal basic income pilot, which ran over a two-year period in 2017 and 2018.

During the trial 2,000 unemployed people were paid €560 per month ‒ that’s around £500 in today’s money ‒ and that cash wasn’t reduced if they found a job, bagged a pay rise or whatever. 

Effectively, there were no strings attached for the recipients, who were aged between 25 and 58. 

The group was tested against a control group of around 173,000 people who were on regular unemployment benefits at the time.

And the results are pretty eye-opening.

Happier and happy to work

For starters, the trial seems to indicate that having a universal basic income in place doesn’t serve as a disincentive against actually finding a regular job.

The income recipients worked an average of 78 days between November 2017 and October 2018. That was actually six days more than those receiving regular unemployment benefits.

Interestingly there was a greater increase in employment for recipients with children, and for those for whom Finnish or Swedish is not their first language.

There are other benefits apparent from the trial too, beyond the fact that it doesn’t hold recipients back from seeking more full-time employment.

The trial doesn’t just look at the financial aspects of a universal basic income, but the mental side too, and it’s pretty clear that this form of safety net provides real support to the mental health of those receiving it.

The study found that those getting the income enjoyed better mental health and cognitive functioning, as well as feeling more confident about their futures.

Overall then the universal basic income not only helped clear some anxiety from those out of work, it provided them with greater confidence and mental focus, and in the process seemed to spur a move towards employment rather than away from it.

International experiments

It’s not just Finland who is taking the idea of universal basic income seriously enough to test how it could work in practice, either.

Germany for example has just begun its own trial, albeit on a smaller scale than the Finnish experiment.

Over the next three years 120 volunteers will receive monthly payments of €1,200 (£1,080 roughly), with their experiences then compared with 1,380 who do not receive the payments.

Everyone participating in the study will be quizzed on their  lives, work and emotional state to determine what impact ‒ if any ‒ receiving a universal basic income has.

There are a host of trials ongoing across Europe, with a handful in the Netherlands alone, while a form of universal basic income has been in place in Alaska since the early 1980s.

It’s an idea, a philosophy that is catching the attention of the authorities across the globe.

What difference has Covid-19 made?

One of the ways that the Government has reacted to the chaos caused by Covid-19 has been to implement a sort of basic income scheme.

A huge number of people across the country have effectively had their wages paid by the Government, whether through the furlough scheme or the Self-Employed Income Support Scheme (SEISS).

But the truth is that if we had a universal basic income scheme in place, we may have been able to react more effectively to the challenges of Covid-19, according to Anthony Painter, chief research and impact officer at the Royal Society for the encouragement of Arts, Manufacturers and Commerce (RSA).

After all, the Government would simply have had to increase the payments in order to support everyone, rather than launch complicated schemes which end up excluding people, as was the case with the self-employed programme which left around a third of people that work for themselves unable to access any help.

And as we know from the various means-tested support schemes previously launched, they are inevitably too complicated and poorly directed, leaving people that would most benefit from them excluded entirely.

The fundamental case for having a universal basic income scheme hasn’t changed as a result of Covid-19.

It’s still an idea that could provide some stability and reassurance to people across the nation, without necessarily reducing the appetite for finding employment.

But Covid-19 has made more people feel that financial insecurity, and opened more eyes to how a universal basic income scheme could help in times of crises.

It’s past time that we took the idea seriously and at the very least ran trials of our own in the UK.

What do you think? Should we have a basic income in the UK? Share your thoughts in the comments section below