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Design and Evaluation of the Finnish Basic Income Experiment

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  • Kari Hämäläinen
  • Jouko Verho

Abstract

The Finnish basic income experiment was an ambitious effort to study basic income in a Nordic welfare state. This paper describes the planning, implementation, and scientific evaluation of the experiment. The randomized treatment group was paid a guaranteed monthly income, which had no impact on disposable income while a person was unemployed but provided a substantial increase in work incentives. We extend previous evaluations by examining the heterogeneity of incentive changes and employment responses across households. Our results reveal improvements in employment only for couples with children, providing an interesting contrast to other in-work credit programs.

Suggested Citation

  • Kari Hämäläinen & Jouko Verho, 2022. "Design and Evaluation of the Finnish Basic Income Experiment," National Tax Journal, University of Chicago Press, vol. 75(3), pages 573-596.
    • Handle: RePEc:ucp:nattax:doi:10.1086/720737
    DOI: 10.1086/720737
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    References listed on IDEAS

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    1. Bruce D. Meyer & Dan T. Rosenbaum, 2001. "Welfare, the Earned Income Tax Credit, and the Labor Supply of Single Mothers," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(3), pages 1063-1114.
    2. David Card & Dean R. Hyslop, 2005. "Estimating the Effects of a Time-Limited Earnings Subsidy for Welfare-Leavers," Econometrica, Econometric Society, vol. 73(6), pages 1723-1770, November.
    3. Jacob Bastian, 2020. "The Rise of Working Mothers and the 1975 Earned Income Tax Credit," American Economic Journal: Economic Policy, American Economic Association, vol. 12(3), pages 44-75, August.
    4. Nada Eissa & Jeffrey B. Liebman, 1996. "Labor Supply Response to the Earned Income Tax Credit," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(2), pages 605-637.
    5. Bruce D. Meyer, 2010. "The Effects of the Earned Income Tax Credit and Recent Reforms," NBER Chapters, in: Tax Policy and the Economy, Volume 24, pages 153-180, National Bureau of Economic Research, Inc.
    6. Eissa, Nada & Hoynes, Hilary Williamson, 2004. "Taxes and the labor market participation of married couples: the earned income tax credit," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1931-1958, August.
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    Cited by:

    1. Hema Shah & Lisa A. Gennetian, 2024. "Unconditional cash transfers for families with children in the U.S.: a scoping review," Review of Economics of the Household, Springer, vol. 22(2), pages 415-450, June.
    2. Anita Rizvi & Madeleine Kearns & Michael Dignam & Alison Coates & Melissa K. Sharp & Olivia Magwood & Patrick R. Labelle & Nour Elmestekawy & Sydney Rossiter & Ali A. A. Al‐Zubaidi & Omar Dewidar & Le, 2024. "Effects of guaranteed basic income interventions on poverty‐related outcomes in high‐income countries: A systematic review and meta‐analysis," Campbell Systematic Reviews, John Wiley & Sons, vol. 20(2), June.

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    More about this item

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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