The document summarizes findings from Finland's 2017-2018 basic income experiment. It finds: 1) No effect on employment in 2017 but a small increase in 2018. 2) Unemployment benefits were substantially but not totally replaced by the basic income payments. 3) Basic social assistance take-up reduced significantly likely due to higher incomes from the experiment. 4) Only a small decrease in housing allowance take-up occurred in the second year. 5) Those receiving basic income reported feeling less bureaucracy in the benefits system compared to the control group. 6) Differences in benefit take-up vanished after the experiment ended.

1. Benefit take-up in the Finnish
Basic Income Experiment
Miska Simanainen
Social Insurance Institution
Research Unit
17/12/2021

2. Background
• Finland conducted a field experiment with a basic income policy in 2017-
2018
• The primary aim was to study the effects of introducing a basic income on
employment
• The list of secondary outcomes included the use of existing other social
benefits

3. Contents
• Summarize the experiment and its main results
• Describe how the experiment affected the take-up of other social benefits
• Payments (unemployment benefits, housing support, social assistance)
• Contacts to benefit officials
• Subjective experiences of benefit claiming

4. Sources of information
• A register-based evaluation study on employment by Hämäläinen,
Kanninen, Simanainen, Verho
• Verho et al. 2021
• A survey-based study on subjective wellbeing by Kangas et al.
• Kangas et al. (Eds.) 2021
• An ongoing further research project (VATT and Kela) on secondary
outcomes by Hämäläinen, Simanainen, Verho

5. The experiment
and its main
results

6. The Finnish benefit system
• Primary benefits provide income for the unemployed and those outside labour force
• Earnings-related unemployment benefits, basic unemployment benefits paid by the Social Insurance Institution
(basic allowance, labour market subsidy)
• Earnings-related and basic daily allowances for parental leaves, sick leaves and rehabilitation
• Earnings-related and basic pensions, student benefits etc.
• Earnings may decrease the amount, e.g., in case of unemployment benefits for part-time workers, the tapering
rate is 50%
• Housing allowances provide support for the low income households to cope with housing costs
• General housing allowance, housing allowance for pensioners
• In housing allowance, earnings and primary benefits over the basic level decrease the allowance with a
tapering rate of 34%
• Social assistance provides monetary support in the case the household cannot meet the basic
costs of living
• Basic social assistance paid by the Social Insurance Institution since 2017
• Additional and preventive social assistance paid by the municipalities
• Most incomes decrease the amount of social assistance with a tapering rate of 100%

7. The Finnish Basic Income Experiment
• Targeted to 25-58 year old basic unemployment benefit recipients (Nov
2016), N=175,000
• 2,000 persons were randomly chosen from the target population to receive
a basic income for two years (2017-2018)
• The rest of the persons in the target population formed the control group,
N=173,000

8. The basic income policy
• An unconditional cash transfer of 560 euros was paid monthly
• No requirement to work, search for jobs or participate in employment measures
• Paid regularly and in advance (the second banking day of a month)
• No income-testing or means-testing, no adjustments to earnings
• Some statuses prevented the payment (e.g., imprisonment, moving abroad, some
benefits like pensions)
• The participants were able apply for other social benefits
• Basic income was deducted fully from primary benefits
• Basic income was taken as a benefit income in general housing allowance and basic
social assistance

9. The treatment group in 2016, on average
• 24 days in employment
• 268 days on unemployment benefits
• 1,900 euros of earnings
• 87 % on labour market subsidy, 13 % on basic unemployment allowance
• 40 % singles, 18 % couples, 27 % couples with children, 16 % adults with
children

10. Some relevant findings from the main evaluation
study to consider here
• No employment effect during the first year (Hämäläinen et al. 2019)
• A small increase (6 days) compared to controls in 2018 (Hämäläinen et al.
2020)
• The experiment resulted in higher incomes compared to controls (Verho et
al. 2021)
• The average yearly income was increased by 12-14 % during the years 2017-2018
• The total monthly income of the treatment group was on average 209 euros and 166
euros higher than in the control group in 2017 and 2018

11. Benefit take-up
during the
experiment

12. Basic unemployment
benefits
There is a flow of persons from
unemployment benefit schemes to
employment and outside labor force.
The share of persons receiving
unemployment benefits decreases faster
among the basic income recipients.
Considering the null result on employment,
there is potential non-take-up of
unemployment benefits during the
experiment.

13. Having vs. not having additional parts in UEB
The difference in take-up between treated and controls was smaller for those with additional benefit parts than for
those without additional benefit parts.

14. General housing
allowance
The share of persons in households receiving
general housing allowance is unaffected
during the first year.
There is a slight decrease in the take-up
during the second year which is consistent
with the increase in incomes.
But what explains the first year? Reviewing
practices?

15. Basic social assistance
The difference in the take-up of social
assistance between the groups is likely
reflecting the increase of income caused by
the experiment.
The difference is largest in Jan 2017 when the
participants received both unemployment
benefits for Dec 2016 and a basic income for
Jan 2017. In Jan 2019, the situation is the
opposite.

16. Contacts
There are more contacting persons in the
treatment group in the beginning and in the
end of the experiment than in the control
group.
However, there are slightly less contacting
persons in the treatment group during the
second year which is consistent with the
observed differences in benefit take-up.

17. Bureaucracy of
claiming benefits
Basic income
N=586
Control
N=1047 P=0.011
Yes 57 % 64 %
No 36 % 31 %
Not sure 7 % 5 %
A survey study was conducted during the
second year of the experiment
The questionnaire included a question on
claiming benefits:
Q: When you think about the past two years,
do you feel that there is too much
bureaucracy involved when claiming social
security benefits? A: Yes, No, Not sure

18. To summarize
• No effect on days in employment in 2017
• A small increase in 2018
• A substantial but not total replacement of unemployment benefits
• A substantial reduction in the take-up of basic social assistance, most likely
due to higher incomes
• Only a small (if any) decrease in the take-up of general housing allowance
during the second year
• The share of persons reporting excessive bureaucracy in benefit claiming
smaller in the treatment group than in the control
• Differences in benefit take-up vanish after the experiment ends

19. Thank you!
• Verho et al. 2021. Removing Welfare Traps: Employment Responses in the
Finnish Basic Income Experiment.
• https://urn.fi/URN:ISBN:978-952-274-275-9
• Kangas et al. (Eds.) 2021. Experimenting with Unconditional Basic Income.
Lessons from the Finnish BI Experiment 2017-2018.
• https://doi.org/10.4337/9781839104855
• New topics covered in the further research project (Vatt & Kela), e.g.,
• Health and use of health services
• Income poverty
• Other social and labor outcomes

20. Miska Simanainen
Researcher
Social Insurance Institution
Research Unit