tutor2u | Finland give €560 basic income to unemployed

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Finland give €560 basic income to unemployed

Jonny Clark

3rd January 2017

Finland have become the first European nation to trial a system of paying a basic income (worth €560 a month) to unemployed people.

Finland: Experimental income scheme raises questions

The suggestion may be a fascinating example for an A Level student to use as a government policy for combating inequality or as a method of encouraging people to search for new employment.

The idea stems from the view that some people do not search for or take up new employment opportunities as they are concerned about losing some benefits and actually being worse off financially when they start a new job. The Finnish system means that the monthly basic income would be retained even after a paid job has been found.

Of course, some might suggest that this will encourage unemployed people to remain without work (as it is a guaranteed income).

An evaluative answer from a student may suggest that this policy may be more effective in an economy where the benefits system is more complex (leading to a greater drop in incoming monies) and might therefore be less valuable in the UK (with its Universal Benefit system).

Another argument may be that it would be a more effective policy in the UK due to the relatively high level of income inequality that exists between those without jobs compared to those in paid work.

Jonny Clark

Jon Clark has been teaching economics and business studies for over 25 years primarily in the Further Education sector. Before joining tutor2u, he was a senior manager at South Cheshire College in Crewe.

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