experimenting with basic income in finland
TRANSCRIPT
Experimenting Basic Income in Finland
Olli Kangas ([email protected])Professor, Research DirectorKela, Social Insurance Institution of Finland
A Governmental Mandate
• Prime Minister Juha Sipilä’s governmental program includes a number of social experiments• The basic income experiment is one of them
• The aim is to reform the existing social policy to better match with societal changes, abolish work disincentives and diminish bureaucracy.
• In an open bid the Kela-led research consortium consisting of • the VATT Institute for Economic Research and Social & kommunalhögskolan• Universities of Turku and Tampere, • think tank Tänk, • the Finnish Innovation Fund (SITRA), • Federation of Finnish Enterprises.• There are also experts representing municipalities and constitutional, social and
tax legislation2
Time table and funding
• Time table for the consortium: • the first hearing 5. December 2015, • the interim report 30 March• the final report 15.11.2016.
• The experiment will start in the beginning of 2017 and it will last 2 years• In 2019 results will be evaluated
• The funding comes from the Government • € 20 bill for two years
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There is a wide popular support for the basic income in Finland
Support Wished for level € (median)
• 2002 63% € 622• 2015 69% € 1 000
• The wished for medians are 1.3 times the level of minimum pension
• Support among voters for all political parties: • Left League 86%, Social Democrats 69%, Greens 75%,
Centre 62%, True Finns 69%, Christian Democrats 56%, Swedish People’s Party 83%, Conservatives 54%.
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Models to be explored and developed
• The task for the working group is to consider: • Full basic income (BI)
• The level of BI is high enough to replace almost all insurance-based benefits
• Must be rather a high monthly sum • Partial basic income
• Replaces all ’basic’ benefits but almost all insurance-based benefits left intact
• Minimum level should not be lower than the present day minimum level of basic benefits (ca net € 550 a month)
• Negative income tax• Income transfers via taxation system
• Other models• Perhaps low BI plus ’participation’ income
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Methods
• Specification of models to be explored• Juridical aspects dealing with social legislation• Taxation • Juridical aspects dealing with constitution (equal treatment of
residents and right to have social care and income protection)• Evaluating the costs by micro simulations
• distribution of benefits and costs• Which options appear to be im/possible
• Planning the experimental setting • Constitutional limitations: demand of equal treatment of all
− Voluntariness -> selection bias − Two stage sampling among volunteers: Treatment and control group
− Obligatory: − Local experiments to capture externalities 6
Experimental settings (an example of an optimal research setting, nothing selected yet)
• To get scientifically reliable results and evidence for policy making the experimental setting must
• Include a sufficient number of households (rather than individuals)
• Be nationally representative• A nation level randomization e.g., 10 000 cases
• Include a county level experiments • A random sample of e.g., 10% of a county
• local experiments in order to capture institutional and interaction effects and various externalities • e.g. as follows: local municipalities with 10%, 30% random sampling and
perhaps 2 municipalities with 100% samples. 7
The working group evaluates the models, research setting and samples to be experimented
• The task for the working group is to make a plan for the experiment
• After the first report (due to 30 March 2016) the Government decides which models should be further developed
• Later in the year 2016 the Government will decide which model/s will be experimented, what is the target population and what is the experimental setting• the expert group is preparing suggestions for that decision
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