Evaluation of the experiment

Abstract

The aim of the Finnish basic income experiment was to provide information for the coming social security reforms and to test a new type of social security benefit that would better meet the challenges of the future labour market. From the outset, the idea was to run a randomised controlled trial that could be reliably evaluated. Randomised controlled trials have been used in medicine for several decades to examine the effects of various medicines. In addition, randomised controlled trials have become widespread in development economics, and they have extended over the social sciences. Randomised controlled trials conducted in natural settings are often called field experiments. Randomised controlled trials are utilised in cases where it is unclear what the actual effect would be and whether a treatment, such as development programmes, is effective (Gerber and Green, 2012; Glennerster and Takavarasha, 2013). Trials can also be informative for policy implementation because costs and risks are significantly lower in an experiment organised in a small scale than in a full-scale implementation process (Haynes et al., 2012). In real life, we cannot observe both outcomes for the same individual simultaneously with and without treatment. In other words, we cannot observe the counterfactual. Units of the target group, such as individuals or villages, are divided into groups in a randomised controlled trial. The assignment to the treatment and control groups is random, ensuring that the average effect of the treatment can be evaluated. The treatment and control groups have no systematic differences affecting the results, which imitates the counterfactual. In addition, the effects of external factors, such as economic fluctuations, can be excluded. As a result, randomised controlled trials allow causal inferences to be made. When the treatment and control groups are identical at the beginning of the experiment, the observed difference between the groups is attributed to