(Forbes.com) - What if, instead of a series of complicated bureaucracies issuing welfare checks, food stamps, and tax credits, social benefits were distributed to everyone without regard to income or employment status?
That’s exactly what the government of Finland is contemplating. The Finnish government is investigating whether it might make good financial sense to make a tax-free monthly payment of about 800 euros ($871.86 US) to all adults in the country, regardless of income, employment status or qualification for other kinds of benefits. Those other benefits would largely be eliminated.
It’s far from being a done deal: at this point, it’s only a preliminary study. The study is being conducted by Kela, the Social Insurance Institution of Finland, which operates under the supervision of Finland’s Parliament.
The study began in October at the request of the Finnish government. It’s a collaborative effort between the Research Department at Kela; University of Helsinki; University of Tampere; University of Eastern Finland; University of Turku; Sitra Innovation Fund Tänk (a Finnish think tank); and VATT Institute for Economic Research. The project is headed by Professor Olli Kangas, director of research at Kela.
The purpose of the study is to find new ways to improve the current system, including making it more efficient. The study, which has been referred to as “a universal basic income experiment,” has as a primary goal, incentivizing going back to work; some in the present government believe that the current system serves as a disincentive to look for work. Finland’s unemployment rate is awhopping 9.5%, about twice the rate in the United States (which currently sits around 5.0%). (Full Text)
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