Finland Basic Income Experiment
Kela (Finnish Social Insurance Institution) · Finland · 2017
Summary
Finland's basic income experiment was the first national-scale randomized test of unconditional income support. The headline results were modest but clarifying: recipients worked a few more days than controls — demolishing the argument that unconditional income destroys work incentives — and reported dramatically better mental health, more trust in government, and greater sense of autonomy. The employment effect was real but small; the wellbeing effect was large and consistent. The experiment's design limitation was that it targeted only unemployed adults, making it impossible to generalize to a universal program. But it provided the strongest available causal evidence that removing conditionality from income support does not cause recipients to exit the labor force, and substantially improves psychological flourishing.
Research question
"Does replacing conditional unemployment benefits with an unconditional basic income improve employment and wellbeing among unemployed adults?"
Methodology
Intervention
2,000 unemployed adults aged 25–58 were randomly selected to receive €560/month unconditionally for two years — replacing, not supplementing, their standard unemployment benefit. Recipients were free to work, study, or start a business without the benefit being reduced. The control group received standard unemployment benefits with their usual conditionality (job-search requirements, benefit reduction upon employment).
Assignment
Randomized controlled trial; 2,000 treatment participants selected from 175,000 unemployment benefit recipients by Kela; control group drawn from the same population
Sample size
2,000 treatment; matched control group drawn from unemployment register
Primary outcome
Days in employment during 2018; subjective wellbeing and mental health at 1-year survey
Effect estimate
Employment: treatment group worked an average 6 more days than controls in 2018 (statistically significant but modest). Wellbeing: treatment group reported significantly higher life satisfaction (+0.09 SD), lower psychological distress, greater trust in institutions, and lower perceived bureaucracy. No significant increase in income.
Decision
Results generated intense international debate about UBI design; Finland did not extend or expand the program; partial employment effect used by proponents to argue UBI does not reduce work effort; wellbeing findings widely cited in mental health and poverty research; experiment influenced subsequent pilots in Canada, Wales, Kenya, and multiple US cities
Result
Mixed
Employment: treatment group worked an average 6 more days than controls in 2018 (statistically significant but modest). Wellbeing: treatment group reported significantly higher life satisfaction (+0.09 SD), lower psychological distress, greater trust in institutions, and lower perceived bureaucracy. No significant increase in income.
Evidence strength
Strong
Randomized controlled trial with large sample.
Replication status
Partially replicated
Institution
Kela (Finnish Social Insurance Institution)
Location
Finland
Year
2017
Policy area
Basic Income
Mechanism
Cash transfer