Written by Staff Writer
03 Jan, 2017 | 10:43 am
Finland launched an interesting social experiment in 2017: offer a monthly sum of money to jobless citizens in an effort to boost employment and reduce poverty.
2,000 randomly picked citizens will receive unemployment benefits starting January 1st 2017. The average private sector income in Finland is 3,500 euros per month, according to official data. Those chosen will receive 560 euros every month, with no reporting requirements on how they spend it. The amount will be deducted from any benefits they already receive.
The social experiment hinges on the theory that providing citizens with this money will abolish the “disincentive problem” and create opportunities for these people to invest in their future. This economic strategy is called Basic Income, which at its core is essentially free money for every person once they reach a certain age, without any prerequisites.
The idea behind Basic Income is that by giving every individual a certain amount of money with which to keep themselves out of poverty, they are better off regardless of all other factors. If a person has a well-paying job, they still get Basic Income, just like everyone else, thereby creating a society in which every adult is above poverty and also continually contributing to the economy by spending money. Basic income is part of government conversations in Canada, India, and the Netherlands.
However, there are uncertainties in this seemingly Utopian plan. What if providing citizen’s with free money will reduce their incentive to work? Since citizens who take part in this experiment know that the benefits are only temporary, will they make positive permanent changes based on it?
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