People Are Better Off With Universal Basic Income Than Unemployment Benefits, Says Study

An extensive study on universal basic income claims that it is able to improve recipients¡¯ mental and financial well-being. In addition, such a source of income is also found to have a positive impact on employment.

The study was conducted by Finland over two years in 2017 and 2018. During the time period, the Finnish government provided a monthly payment of €560 (~Rs 46,000) to 2000 unemployed people aged between 25 and 58 without any terms and conditions.

The monthly payments weren¡¯t cut off even if an individual got a job or had a pay raise. The nationwide study was meant for selected recipients who could not opt out of it as the test was written into legislation.

(Representative Image: Reuters)

The study was meant to compare the employment and well-being of basic income recipients against those who receive unemployment benefits. A control group of 173,000 people on the latter was targeted for the comparison.

The results of the study were announced in Helsinki today by Minna Ylik?nn? at the Social Insurance Institution of Finland via livestream. As per the results, people on basic income worked an average of 78 days between November 2017 and October 2018, six days more than those on unemployment benefits.

The former group also reported to be ¡°more satisfied with their lives and experienced less mental strain, depression, sadness and loneliness.¡± In addition, they had a more positive perception of their cognitive abilities, income and economic well-being and were ¡°more confident in their own future,¡± as per the study.

A similar effect can also be observed in the ongoing times of stress during the COVID 19 pandemic.

Results of Finland's basic income experiment: small employment effects, better perceived economic security and mental wellbeing (Image: Kela)

Ylik?nn? explained how, ¡°I think it would bring people security in very insecure situations when they don¡¯t know whether they¡¯re going to have an income.¡±

The research, however, was complicated to an extent by the introduction of legislation called the ¡°activation model.¡± Introduced by the Finnish government at the beginning of 2018, the model made access to unemployment benefits more difficult.

Hence, the experiment in itself cannot be considered as the sole reason for the result. ¡°We can only say that the employment effect that we observed was as a joint result of the experiment and activation model,¡± Ylik?nn? said.