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Partial basic income has positive and no heterogenous effects on mental health – An analysis of the Finnish basic income randomized experiment among people in unemployment

Author

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  • Aapo Hiilamo

    (Max Planck Institute for Demographic Research, Rostock, Germany)

  • Moritz Oberndorfer

Abstract

A randomized trial of a partial basic income scheme for the population in unemployment in Finland was conducted in 2017–2018. No studies to date that we are aware of have investigated to what extent the effects of the trial on self-reported mental health were heterogeneous. This is an important question for understanding the implications of basic income schemes for the distribution of mental health in a population. We studied effect heterogeneity using data from a survey conducted at the end of the two-year experiment with a response rate of 20% (intervention n=569, control n=1028). Mental health was measured by the MHI-5 five-item instrument. We considered effect heterogeneity across potential indicators of labor market disadvantages, including age, gender, education, prior employment status, household size, and family type. Participants in the intervention group had moderately better mental health compared with those in the control group (adjusted risk difference for poor mental health -0.08 [95%CI: -0.12; -0.03]). Multilevel modelling and causal forest showed no evidence for heterogenous effects on mental health. Our results suggest that basic incomes schemes have no harmful effects on mental health across multiple potential axes of labor market disadvantage, and are unlikely to increase mental health inequalities among people in unemployment.

Suggested Citation

  • Aapo Hiilamo & Moritz Oberndorfer, 2025. "Partial basic income has positive and no heterogenous effects on mental health – An analysis of the Finnish basic income randomized experiment among people in unemployment," MPIDR Working Papers WP-2025-035, Max Planck Institute for Demographic Research, Rostock, Germany.
    • Handle: RePEc:dem:wpaper:wp-2025-035
    DOI: 10.4054/MPIDR-WP-2025-035
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    1. Sandra Bohmann & Susann Fiedler & Maximilian Kasy & Jürgen Schupp & Frederik Schwerter, 2025. "Cash Transfers, Mental Health and Agency: Evidence from an RCT in Germany," Discussion Papers of DIW Berlin 2129, DIW Berlin, German Institute for Economic Research.
    2. repec:ces:ceswps:_11989 is not listed on IDEAS
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      JEL classification:

      • J1 - Labor and Demographic Economics - - Demographic Economics
      • Z0 - Other Special Topics - - General

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