Finland\'s universal basic income test fails to boost employment

It turns out giving away "free money" doesn't cut unemployment - at least not in Finland.

On Friday (February 8) the government announced the results of its two-year experiment, which saw 2,000 randomly chosen unemployed Finns become the first Europeans to enjoy a guaranteed universal basic income.

(SOUNDBITE) (English) REUTERS CORRESPONDENT ANNE KAURANEN SAYING: "The participants, they actually didn't start working more like the government was hoping.

Although the bureaucracy was taken away from them, they didn't work anymore than the control group that was involved in the study did.

So it didn't have the effect that the politicians were hoping to see." Unemployment has been persistently high in Finland and, with an aging population, the country needs to renew its welfare system.

(SOUNDBITE) (English) REUTERS CORRESPONDENT ANNE KAURANEN SAYING: "So the government basically wants to get the jobless back to work and when somebody loses their job it takes them time to start receiving the benefit so they don't really want to accept small jobs or temporary employment as they lose the benefits again." Sini Marttinen was one of the participants.

She received a monthly pay check of $635 from the state for two years - regardless of whether or not she found a job.

(SOUNDBITE) (English) BASIC INCOME TRIAL PARTICIPANT, SINI MARTTINEN, SAYING: "So money-wise it's not a big difference but the sentence (in the letter) of the benefit being unconditional, meant that I could actually get the benefit and earn on top of it with part-time work or any work.

I think the biggest effect was psychological." While the impact on unemployment was minimal, those in the UBI trial reported feeling happier and healthier.

Right now though, it looks unlikely that politicians will conclude that UBI is the solution to the country's unemployment problem.