Finland’s two-year pilot scheme started in January 2017, making it the first European country to test an unconditional basic income. The 2,000 participants – all unemployed – were chosen randomly.
But it will not be extended after this year, as the government is now examining other schemes for reforming the Finnish social security system.
. . . In February this year the influential OECD think tank said a universal credit system, like that being introduced in the UK, would work better than a basic income in Finland. Universal credit replaces several benefit payments with a single monthly sum.
The study by the Organisation for Economic Co-operation and Development said income tax would have to increase by nearly 30% to fund a basic income. It also argued that basic income would increase income inequality and raise Finland’s poverty rate from 11.4% to 14.1%.
In contrast, the OECD said, universal credit would cut the poverty rate to 9.7%, as well as reduce complexity in the benefits system.
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