Removing welfare traps: Employment responses in the Finnish basic income experiment

Arbeitspapier

This paper provides evidence that replacing minimum unemployment benefts with a basic income of equal size has minor employment effects at best. We examine an experiment in Finland in which 2,000 beneft recipients were randomized to receive a monthly basic income. The experiment lowered participation tax rates by 23pp for full-time employment. Despite the considerable increase in work incentives, days in employment remained statistically unchanged in the frst year of the experiment. Moreover, even though all job search requirements were waived, participation in reemployment services remained high.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: EconPol Working Paper ; No. 61

Classification and Topics

• Classification: Wirtschaft ; Field Experiments ; Social Security and Public Pensions ; Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs ; Unemployment Insurance; Severance Pay; Plant Closings
• Subject: Employment ; Field experiment ; Social insurance ; Unemployment benefits

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Verho, Jouko ; Hämäläinen, Kari ; Kanninen, Ohto
• Event: Veröffentlichung
• (who): ifo Institute - Leibniz Institute for Economic Research at the University of Munich
• (where): Munich
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/233806
• Last update: 10.03.2025, 11:45 AM CET