Tom Ward reports that universal basic income (UBI) is a hot topic in the world today. So far, however, very few experiments have been conducted to ascertain precisely how best to implement such a system. For that reason, a small-scale UBI experiment in Finland has drawn much attention as one of the few real-world examples we have of how UBI could work.
The trial began earlier this year and is being managed by Kela, the National Social-Insurance Institute. Kela selected 2,000 Finns between the ages of 25 and 58, each of whom was receiving some form of unemployment benefits, to receive 560 Eros (about $645) per month.
In theory, this project would give the world new insights into the logistics and consequences of introducing a UBI system. However, the trial has been riddled with issues and mistakes from the start due to improper planning and a troubled political environment, and now, it is little more than a lesson of how not to run a UBI experiment.
Among the most serious errors was a slashing of the sample size to just one-fifth the number suggested in the original proposition. This extremely small dataset is not enough to be scientifically viable. Additionally, the trial kicked off during a period of economic turmoil in Finland. The country economy had suffered three recessions since 2008, and this state-sponsored UBI project was launched in a time of economic austerity.
Although the results of the project, which will be announced in 2019, may give us some insights into the viability of future UBI programs, even those who designed the Finnish experiment are skeptical of its validity. Olli Kangas, Kela coordinator for the program, told The Economist that it was currently in a state of neglect, comparing politicians actions to small boys with toy cars who become bored and move on.
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