Finland plans to introduce basic income

The government of Finland is planning to replace all its existing welfare benefits with a basic income for all citizens.

Under the proposals, which will be finalized next year, all citizens would receive a standard monthly payment expected to be €800, whether or not they are in work.

The plans are being drawn up by the Finnish Social Insurance Institution (Kela), with the final proposals expected by November 2016. The government will then trial the system, during which period citizens will receive a lower payment of €550 a month while some existing benefits remain in place.

According to a poll commissioned by Kela, the policy has the support of around 70% of the Finnish population. However, some critics suggest it may prove to be unaffordable.

In January, the city of Utrecht in the Netherlands will also trial a basic income system as part of an experiment in partnership with the city’s university. Switzerland will also hold a referendum on introducing a basic income in 2016, although its parliament has called on voters to reject the proposal.

Ugo Colombino has written for IZA World of Labor about unconditional basic income and whether it is a viable alternative to other social welfare measures. He writes that: “While an unconditional basic income policy is simple and transparent, with low administration costs, financing it might require higher taxes. Although the evidence on implied efficiency losses is mixed, carefully designed taxes can avoid the risk of canceling the potential benefits of unconditional basic income through efficiency losses.”

Read more on this story at Quartz.

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Is unconditional basic income a viable alternative to other social welfare measures? by Ugo Colombino