An experiment giving 2,000 unemployed an unconditional, tax-free payment every month created happier citizens but failed to markedly increase employment levels, Finnish researchers said on Wednesday.
The Helsinki government allocated 20 million euros ($21.6 million) to the two-year trial which guaranteed a "basic income" of 560 euros ($604) to a randomly selected group of jobless people. Researchers studied whether the no-strings-attached income could incentivise them to find work more than traditional unemployment benefits, which may be docked as soon as the recipient starts earning money.
However, researchers said basic income led to participants being employed for an average of just six extra days during a one-year period of the trial. The "small" effect on work suggested that for some benefit recipients, "the problems related to finding employment are not related to bureaucracy or to financial incentives," Kari Hamalainen of Finland's VATT Institute for Economic Research said in a statement.
A basic income has been widely touted as a possible solution to the economic fallout of the coronavirus crisis, which has put tens of millions of jobs at risk worldwide.
Although the Finnish study did not produce the hoped-for job market stimulus, participants "were more satisfied with their lives and experienced less mental strain, depression, sadness and loneliness," researchers said.
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