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Finland gave people free money. It didn’t help them get jobs — but does that matter?

Receiving a basic income had other great effects on the unemployed.

A financial phone app. Sarah Lawrence for Vox

Preliminary results are in for Finland’s landmark experiment with basic income — the idea that the government should give citizens a regular infusion of free cash with no strings attached. The outcome is not what Finland hoped it would be. But it’s arguably a success anyway.

The Finnish trial, the results of which were released Friday, wasn’t an experiment in universal basic income (UBI), which includes all citizens whether they’ve got jobs or not. Rather, it was a targeted attempt to see what would happen if the government chose 2,000 unemployed citizens at random and gave them a check of 560 euros ($635) every month for two years. Participants were assured they’d keep receiving the money if they got a job. In fact, the experiment’s stated goal was about “promoting employment” — the government wanted to see if having a basic income leads people to accept more work, even if it’s low-paying or temporary.

By that metric, the experiment was a failure: Receiving free money didn’t impact the likelihood of people entering the workforce one way or another.

But here’s what the basic income did do: It made recipients feel happier and less stressed. “The basic income recipients of the test group reported better wellbeing in every way than the comparison group,” according to researcher Olli Kangas.

That’s a very positive result, and the fact that it wasn’t what Finland was shooting for shouldn’t be allowed to overshadow it.

Basic income is an idea that rose to prominence so incredibly fast, and was pushed by people with such varying motivations, that there’s a lot of confusion over the most fundamental question about it: What’s it for? What do we want basic income to achieve? Because we lack clear and cohesive ideas about what success would look like, when trial results are announced, our reaction can lack clarity and cohesion, too.

With other countries from Scotland to India currently entertaining basic income schemes, it’s especially important to try to avoid that slippage. They’re watching the Finnish case closely, and a muddled reaction to this case could harm prospects elsewhere.

So, what’s the purpose of basic income?

The idea of universal basic income — that the state should dispense a guaranteed, regular stipend to every single citizen — has been around at least since the 16th century. Its classic aims are to reduce poverty and inequality. Some countries, like Canada, have been experimenting with basic income for decades and others, like Italy, just put a version of it into practice.

In recent years, it has enjoyed a surge of popularity in Silicon Valley, where the innovation boom that has generated so much fear about automation-induced joblessness has pushed powerful people to advocate for basic income, enabling it to gain steam remarkably quickly.

It’s a rare idea that can get endorsed by figures as disparate as the tech billionaire Mark Zuckerberg, the leftist politician Sen. Bernie Sanders (I-VT), the libertarian economist Milton Friedman, and the civil rights activist Martin Luther King Jr.

As my colleague Dylan Matthews has written, however, different people have different dreams for basic income, and “these purposes are often confused and contradictory.” There are those who hope it’ll end poverty. There are those who hope it’ll help society cope with automation-induced joblessness. And there are others who hope it’ll enable them to dismantle the welfare state.

Here’s another way to define the goal of basic income: reduce human suffering. Or, put another way: make people happier.

That’s a great outcome in itself, and Finland’s trial achieved it.

Recipients in Finland’s trial said they felt “less stress symptoms as well as less difficulties to concentrate and less health problems than the control group,” according to researcher Minna Ylikanno. “They were also more confident in their future and in their ability to influence societal issues.”

Feeling less of the pernicious kind of stress that often results from unemployment is an inherent good. It’s also an instrumental good for any government looking to decrease the money it’ll later have to spend on citizens who develop the serious health problems that excessive stress can cause. Earlier experiments in basic income have highlighted this effect: In Dauphin, a town in Manitoba, Canada, a basic income scheme in the 1970s saw a decline in doctor visits and an 8.5 percent reduction in the rate of hospitalization.

The psychological stability afforded by a guaranteed regular paycheck also emboldened some of the Finnish recipients to be more entrepreneurial. Sini Marttinen, one of the recipients, likened her experience on basic income to winning the lottery. “It gave me the security to start my own business,” she said. This entrepreneurial effect has also been observed in the past with cash transfers in places like Kenya.

What’s more, it’s important to note that although getting free money didn’t boost employment among the recipients, that’s not a failure per se — even though Finland would have preferred to see a boost. More to the point is the fact that getting a basic income didn’t induce people to work less. The notion that free money might have that effect has long been one of the main critiques of basic income, a critique that remains popular even though the evidence doesn’t support it. Now, the Finnish trial has added to the evidence discounting it.

It’s worth reiterating that Finland’s was not an experiment in universal basic income — the government didn’t give free money to everybody, just to 2,000 people, a sample size so small that some argue it’s not scientifically meaningful. It didn’t change the number or type of job opportunities available, or the amount of disposable income everyone in the society has to throw around. So it doesn’t really make sense to expect this experiment to significantly boost employment. As Scott Santens observed on Twitter, “The neutral employment impact after one year fits an experiment of only 2K people. Full UBI would increase overall demand, creating new employment opportunities.”

Finally, a reminder: These are just the preliminary results for Finland’s experiment. We should avoid making sweeping conclusions until all the results are in next year. Until that happens, it’s worth using the intervening time to get clarity on the many ways of answering the “what’s basic income for?” question, which so often goes unnoticed precisely because it’s so, well, basic.


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