Finnish Basic Income Experiment

Last registered on March 30, 2022
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Pre-Trial

Trial Information

General Information

Title
Finnish Basic Income Experiment
RCT ID
AEARCTR-0002095
Initial registration date
March 14, 2017

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
March 14, 2017, 7:00 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated
March 30, 2022, 10:45 AM EDT

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Country
Finland
Region
A countrywide experiment

Primary Investigator

Name
Jouko Verho
Affiliation
VATT Institute for Economic Research
Contact Primary Investigator

Other Primary Investigator(s)

PI Name
Ohto Kanninen
PI Affiliation
Labour Institute for Economic Research
Contact Investigator
PI Name
Kari Hämäläinen
PI Affiliation
VATT Institute for Economic Research
Contact Investigator

Additional Trial Information

Status
Completed
Start date
2017-01-01
End date
2018-12-31
Keywords
Labor, Welfare
Additional Keywords
JEL code(s)
C93, H55, I38, J65
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
Finnish Basic Income Experiment is a large scale randomized field experiment organized by the Social Insurance Institution of Finland. The experiment began in January 2017 and it includes 2,000 unemployed workers receiving basic income. The basic income is 560 euros per month and it is paid unconditionally for two years. We will evaluate the effect of this basic income model using register-based data. Our main objective is to estimate the effect of this basic income model on labor supply. Our secondary outcomes include earnings, income, participation in labor market programs, and health indicators.
External Link(s)
Information about the experiment for the participants provided by the Social Insurance Institution of Finland

Registration Citation

Citation
Hämäläinen, Kari, Ohto Kanninen and Jouko Verho. 2022. "Finnish Basic Income Experiment." AEA RCT Registry. March 30. https://doi.org/10.1257/rct.2095-4.1
Former Citation
Hämäläinen, Kari, Ohto Kanninen and Jouko Verho. 2022. "Finnish Basic Income Experiment." AEA RCT Registry. March 30. https://www.socialscienceregistry.org/trials/2095/history/140148
Sponsors & Partners

Partner

Name
The Social Insurance Institution of Finland (Kela)
Type
government
URL
http://www.kela.fi/web/en
Experimental Details

Interventions

Intervention(s)
The treatment group receives the unconditional basic income for two years. The basic income is a monthly benefit of 560 euros that is not affected by the level of employment. The basic income replaces minimum unemployment benefits and it is paid together with other social benefits. As the income tax schedule remains unaffected, the monetary incentives to work increase strongly. Participation in the experiment is mandatory and governed by a law.
Intervention (Hidden)
Intervention Start Date
2017-01-01
Intervention End Date
2018-12-31

Primary Outcomes

Primary Outcomes (end points)
Days in employment
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Annual earnings and income
Take-up of social benefits
Participation in labor market programs and education
Health indicators
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
The target population of the experiment consists of individuals who are 25 - 58 years of age and received the minimum unemployment benefits in November 2016. The Social Insurance Institution of Finland randomized 2,000 individuals into treatment group in December 2017. The rest of the individuals in the target population can be used as a control group.
The follow-up of the experiment will be based on administrative register data. Different registers provide a large set of background characteristics and various outcome variables. Register data are complemented by a survey carried out in October 2018.
Experimental Design Details
Randomization Method
Simple Random Sampling done by The Social Insurance Institution of Finland (Kela)
Randomization Unit
Unemployed individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
No clusters, simple random sampling
Sample size: planned number of observations
The target population includes over 100,000 unemployed individuals.
Sample size (or number of clusters) by treatment arms
The treatment group includes 2,000 individuals receiving basic income.
The control group is defined based on register data and the number of individuals is very large (>100,000).
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Based on historical data on unemployed individuals from 2011 to 2013, we estimate the minimum detectable effect to be around 11% increase in employment days with 80% power and 5% significance level.
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number
Analysis Plan

Analysis Plan Documents

Pre-analysis plan November 2018 (updated)

MD5: ed8b6831dd6f27c7a3824fdaacb1c727

SHA1: 4ee7fc5f0bec9399f371c61f38bc178e9ffd958d

Uploaded At: December 13, 2019

Pre-analysis plan November 2018

MD5: 539a0cb13074e00dd153518ebeae3c2a

SHA1: ba41f477865f044b67fdf4514b2e1fc6f732b21d

Uploaded At: November 19, 2018

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
Yes
Intervention Completion Date
December 31, 2018, 12:00 +00:00
Data Collection Complete
No
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
No
Reports, Papers & Other Materials

Relevant Paper(s)

Abstract
This paper provides evidence that replacing minimum unemployment benefits with a basic income of equal size has minor employment effects at best. We examine an experiment in Finland in which 2,000 benefit recipients were randomized to receive a monthly basic income. The experiment lowered participation tax rates by 23 percentage points for full-time employment. Despite the considerable increase in work incentives, days in employment remained statistically unchanged in the first year of the experiment. Moreover, even though all job search requirements were waived, participation in reemployment services remained high.
Citation
Verho, Jouko, Kari Hämäläinen, and Ohto Kanninen. 2022. "Removing Welfare Traps: Employment Responses in the Finnish Basic Income Experiment." American Economic Journal: Economic Policy, 14 (1): 501-22.
URL
https://doi.org/10.1257/pol.20200143

Reports & Other Materials