Finland has become the first country in Europe to pay its unemployed citizens a basic monthly income, amounting to 560 euros (US$587), in a unique social experiment it hopes would cut government red tape, reduce poverty and boost employment.
Olli Kangas from the Finnish government agency Kela, or the Social Insurance Institution, which is responsible for the nation’s social benefits, on Monday said that the two-year trial with the 2,000 randomly picked citizens who receive unemployment benefits began on Sunday.
Those chosen will receive 560 euros every month, with no reporting requirements on how they spend it. The amount will be deducted from any benefits they already receive.
The average private sector income in Finland is 3,500 euros per month, official data showed.
Kangas said the scheme’s idea is to abolish the “disincentive problem” among the unemployed.
The trial aims to discourage people’s fears “of losing out something,” he said, adding that the selected persons would continue to receive the 560 euros even after receiving a job.
A jobless person may refuse a low-income or short-term job in the fear of having his financial benefits reduced drastically under Finland’s generous, but complex social security system.
“It’s highly interesting to see how it makes people behave,” Kangas said. “Will this lead them to boldly experiment with different kinds of jobs? Or, as some critics claim, make them lazier with the knowledge of getting a basic income without doing anything?”
The unemployment rate of Finland, a nation of 5.5 million, stood at 8.1 percent in November, with about 213,000 people without a job — unchanged from the previous year.
The scheme is part of the measures by the center-right government of Finnish Prime Minister Juha Sipila to tackle the nation’s joblessness problem.
Kangas said the basic income experiment may be expanded later to other low-income groups, such as freelancers, small-scale entrepreneurs and part-time workers.
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