QUEENSTOWN, New Zealand — Finland’s nationwide basic income experiment has captured international attention ever since it began in January 2017. Researchers finally released preliminary results last week, and the verdict is more mixed than both supporters and opponents of the experiment may have hoped.
Over the past two years, 2,000 randomly selected and unemployed Finns older than 25 and younger than 58 were paid about $640 a month, tax-free and with no conditions attached. Although that’s less than monthly unemployment benefits in Finland, which are more than $100 higher, basic income recipients continued to receive the payments even after they had found jobs. Researchers had hoped that this promise may encourage their trial participants to put more effort into landing a job. In reality, they remained just as likely to be unemployed as other Finnish residents receiving ordinary benefits.
But what struck researchers was a more unexpected side effect: Basic income recipients appeared to have become happier overall, suggesting that their well-being increased even though average unemployment rates remained largely unchanged.
The Finnish findings feed into a broader debate about how lawmakers should measure the success of societies. GDP growth or stock market performance are still frequently being used as indicators for how well a country is doing, yet those key figures are often far removed from the realities residents experience.
The United States may have one of the world’s highest gross domestic products, but it came in 18th in the world for national well-being in 2017, according to Social Progress Imperative, a U.S.-based nonprofit organization. The debate about whether to drop our traditional measurements of economic success has gained more momentum in recent months, as some world leaders have publicly backed initiatives to move away from those metrics and have instead argued that more emphasis should be put on citizens’ well-being.
Francine Closener, Luxembourg’s state secretary for the economy, already acknowledged two years ago that there was a disconnect between measured GDP and perceived well-being in her country. “It takes people a lot longer after a low point to start experiencing higher levels of well-being again,” she said, cautioning that GDP data had not revealed the extent of the problem. Luxembourg has started to measure citizens’ well-being with different metrics, also taking into account education or personal security, among other factors.
New Zealand was among the first countries to support an initiative by the Organization for Economic Cooperation and Development (OECD), which urged its member states once again in November to “look beyond the functioning of the economic system to consider the diverse experiences and living conditions of people and households.” In its report last year, the organization proposed that governments should focus more on quality of life, which includes health and work-life balance among other factors, as well as ensuring future well-being and material conditions such as income and wealth.
New Zealand has since considered various ways to translate the OECD’s theoretical ideas into specific policies. Authorities also slightly adapted the framework to reflect advances or shortcomings in fostering the cultural identity of the country’s Maori population, for instance. In May, Prime Minister Jacinda Ardern is set to introduce what she calls “the world’s first ‘well-being budget.’ ”
“We must accept that the race to grow our economies makes us all poorer if it comes at the cost of our environment, or leaves our people behind,” Ardern wrote in an op-ed for the London-based Financial Times last month. In practice, the prime minister indicated that a well-being budget could include mental well-being support schemes for younger citizens, but also projects designed to tackle “climate change, digital transformation, social exclusion, poor health, housing and domestic violence.”
Whether Ardern can deliver on those promises will probably take years to determine, but in the meantime her government already has come under criticism for supposedly not delivering on her promises to provide more affordable housing within a short time frame.
More lasting than any single policy, however, would be a growing consensus in redefining how societies’ success should be measured, beyond GDP and unemployment data. So far, the most promising experiments on this front have emerged from smaller countries, such as Luxembourg and New Zealand, which are already ranking relatively high in well-being statistics.
Bigger nations may not be ready to switch their attention fully to a different set of metrics, but interest appears to be on the rise. “Our well-being approach is generating significant international interest, particularly at a time when the international rules-based order is under strain and leaders are grappling with constituencies dissatisfied with the status quo,” Ardern said in January, when she promoted the idea at the Davos conference in Switzerland.
Ardern’s critics have mainly lashed out at her proposal for being too complicated to be widely implemented, but her supporters maintain that it’s a path worth exploring: “There is no good argument why well-being should not be a national aspiration,” wrote Anna Matheson, a public health lecturer at Massey University in Wellington.
For governments willing to go down that path, however, there’s the risk of failure. After two years of Finland’s basic income experiment, the government there has decided to look for different ways to decrease unemployment. Participants who were happier but still just as unemployed apparently didn’t match Finland’s criteria of a successful society.
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