Finland has been giving 2,000 of its citizens an unconditional income for the last five months and some are already seeing the benefits, reporting decreased stress, greater incentives to find work and more time to pursue business ideas.
The scheme is the first of its kind in Europe and sees participants receive €560 (£473) every month for two years.
Recipients do not have to demonstrate that they are seeking employment and they are not required to regularly report to authorities to prove they still need the payment, as is the case with standard unemployment benefits. They can spend the money however they like.
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Under the pilot, if a participant finds work, they will continue to receive the stipend, removing one of the limitations of current welfare systems - the disincentive to find work.
The trial is one measure introduced by the centre-right government to tackle Finland's unemployment problem.
Juha Jarvinen, an unemployed young father in a village near Jurva, western Finland, was picked at random to receive the payment, starting in January this year. He told the Economist that, unlike when he was receiving standard unemployment payments, he is now actively seeking work.
He had previously been offered a few part-time positions but taking them would make no sense, since it would jeopardise his welfare payments. “It is crazy, so no one will take a bit of work,” he said.
He said he is also in the process of starting a business, is much less stressed and no longer has to go through the “silly show” of filling out forms or attending regular interviews with employment agency officials.
“I’m an artist and entrepreneur. Sometimes I’m too active, I don’t have time to stop,” he said.
“We think it takes social policy in the wrong direction,” Ilkka Kaukoranta, chief economist of the Central Organisation of Finnish Trade Unions (SAK), told Bloomberg.
Business news: in pictures
Show all 10
Business news: in pictures
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2/10 Fingerprint payment
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NatWest/PA Wire
3/10 Mahabis bust
High-end slipper retailer Mahabis has gone into administration. 2 Jan 2019
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4/10 Costa Cola
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5/10 RIP Payday Loans
A funeral procession for payday loans was held in London on September 2. The future of pay day lenders is in doubt after Wonga, Britain's biggest, went into administration on August 30
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6/10 Musk irks investors and directors
Elon Musk has concluded that Tesla will remain public. Investors and company directors were angry at Musk for tweeting unexpectedly that he was considering taking Tesla private and share prices had taken a tumble in the following weeks
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7/10 Jaguar warning
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8/10 Spotif-IPO
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9/10 French blue passports
The deadline to award a contract to make blue British passports after Brexit has been extended by two weeks following a request by bidder De La Rue. The move comes after anger at the announcement British passports would be produced by Franco-Dutch firm Gemalto when De La Rue’s contract ends in July.
The British firm said Gemalto was chosen only because it undercut the competition, but the UK company also admitted that it was not the cheapest choice in the tendering process.
10/10 Beast from the east economic impact
The Beast from the East wiped £4m off of Flybe’s revenues due to flight cancellations, airport closures and delays, according to the budget airline’s estimates. Flybe said it cancelled 994 flights in the three months to 31 March, compared to 372 in the same period last year.
1/10 No deal, no tariffs
The government has announced that it would slash almost all tariffs in the event of a no-deal Brexit. Notable exceptions include cars and meat, which will see tariffs in place to protect British farmers
Getty
2/10 Fingerprint payment
NatWest is trialling a new bank card that will allow people to touch their hand to the card when paying rather than typing in a PIN number. The card will work by recognising the user's fingerprint
NatWest/PA Wire
3/10 Mahabis bust
High-end slipper retailer Mahabis has gone into administration. 2 Jan 2019
Mahabis
4/10 Costa Cola
Coca-Cola has paid £3.9bn for Costa Coffee. A cafe chain is a new venture for the global soft drinks giant
PA
5/10 RIP Payday Loans
A funeral procession for payday loans was held in London on September 2. The future of pay day lenders is in doubt after Wonga, Britain's biggest, went into administration on August 30
PA
6/10 Musk irks investors and directors
Elon Musk has concluded that Tesla will remain public. Investors and company directors were angry at Musk for tweeting unexpectedly that he was considering taking Tesla private and share prices had taken a tumble in the following weeks
Getty
7/10 Jaguar warning
Iconic British car maker Jaguar Land Rover warned on July 5, 2018 that a "bad" Brexit deal could jeopardise planned investment of more than $100 billion, upping corporate pressure as the government heads into crucial talks
AFP/Getty
8/10 Spotif-IPO
Spotify traded publically for the first time on the New York Stock Exchange on Tuesday. However, the company isn't issuing shares, but rather, shares held by Spotify's private investors will be sold
AFP/Getty
9/10 French blue passports
The deadline to award a contract to make blue British passports after Brexit has been extended by two weeks following a request by bidder De La Rue. The move comes after anger at the announcement British passports would be produced by Franco-Dutch firm Gemalto when De La Rue’s contract ends in July.
The British firm said Gemalto was chosen only because it undercut the competition, but the UK company also admitted that it was not the cheapest choice in the tendering process.
10/10 Beast from the east economic impact
The Beast from the East wiped £4m off of Flybe’s revenues due to flight cancellations, airport closures and delays, according to the budget airline’s estimates. Flybe said it cancelled 994 flights in the three months to 31 March, compared to 372 in the same period last year.
The union, which represents almost 1 million members, or a fifth of the Finnish population, said the model being tested is, “impossibly expensive, since it would increase the government deficit by about 5 per cent” of gross domestic product.
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The existing Open Comments threads will continue to exist for those who do not subscribe to Independent Minds. Due to the sheer scale of this comment community, we are not able to give each post the same level of attention, but we have preserved this area in the interests of open debate. Please continue to respect all commenters and create constructive debates.