Basic Income in Some Nordic Countries: Theory and Practice

DOI: 10.20542/0131-2227-2020-64-9-48-52
A. Volkov (
Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences (IMEMO), 23, Profsoyuznaya str., Moscow, 117997, Russian Federation

Acknowledgements. This article has been supported by a grant of the Russian fund of fundamental studies. Project code 19-010-00416 (“The Concept of Unconditional Basic Income and the Prospects for its Implementation under New Social and Technological Challenges”).

Abstract. The article describes development of the idea of unconditional basic income in some Nordic countries. There were active discussions in the early 1980s and in 1992–1994 in Denmark and experiment was conducted on the introduction of unconditional basic income in Finland in 2017–2018. Basic income has never been seriously considered in Denmark on a practical level. For the first time, interest in basic income arose in Denmark in the 1980s. Once again, the issue of basic income was on the official policy agenda in 1992–1994, when there was extensive discussion on this issue. In many ways, these debates were associated with the development of the system of unemployment benefits in the country at that time and a number of economic, institutional and political circumstances. The idea of basic income was considered as a fatal blow, either too controversial or unrealistic, showing that it would require considerable money. Thus, by the mid-1990s, this idea was categorically rejected and disappeared forever from the agenda in Denmark. The unconditional basic income in Finland has been discussed for the last 10 years. It was believed that due to the mass robotization and the introduction of artificial intelligence, a huge number of people would lose their jobs in the future, and the universal basic income will force people to accept temporary contract work which ultimately will increase labor mobility and efficiency. By the classical definition unconditional basic income is the regular payment of a certain amount of money to each member of the community without checking the financial situation or the need to do work. The experiment with unconditional basic income in Finland did not fully meet this definition. First, only the unemployed could take part in it. Secondly, the experiment participants continued to receive benefits from other support systems. The authorities decided to focus on the unemployed in order to understand whether unconditional basic income encourages employment. The 2 000 citizens selected by lottery were unemployed, poor, and were between the ages of 25 and 58 years old. They received 560 euros per month, while the payment did not stop even after they found a job. Intermediate results of the experiment were almost completely opposite to the expected. Requests of recipients of basic income to the labor market have only increased. They said they were not ready to grab any job, and made more and more demands. Both for employers and for trade unions such an outcome was an unpleasant surprise. The preliminary results of the experiment with an unconditional basic income showed that in the first year participants in the experiment were looking for a little more actively than other unemployed people. Although the Finnish authorities did not officially comment on anything, all the experts said that the two-year tests showed the project’s inconsistency. First, the “free” money was in fact an unconditional unemployment benefit, that is, there was nothing new in the proposed version of the universal basic income. Secondly, the government did not conceal that the experiment with the basic income was not aimed at reducing the number of the poor or fighting inequality – its main task was “promoting employment”. If all citizens received unconditional basic income, additional social spending would be about 5% of GDP. This is a lot, even taking into account the fact that Finland spends about 30% of GDP on social spending. A universal basic income can only be successful if provided on a continuous and universal basis. But it requires a lot of money and higher taxes which most people disagree with.

Keywords: unconditional basic income, unemployment, unemployment benefits, experiment, Denmark, Finland


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For citation:
Volkov A. Basic Income in Some Nordic Countries: Theory and Practice. World Eonomy and International Relations, 2020, vol. 64, no. 9, pp. 48-52.

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