Volume 55 - Article 21 | Pages 665–678  

The impact of reducing welfare obstacles on union formation and dissolution among the unemployed: Evidence from the Finnish Basic Income Experiment

By Outi Sirniö, Henri Salokangas, Pasi Moisio, Heikki Hiilamo

Abstract

Background: Enhancing the employment prospects of the long-term unemployed is a widely shared objective of many welfare reforms. However, welfare reforms may have unintended consequences for family dynamics. Previous guaranteed income experiments in North America led to a debate on their negative impact on marital outcomes. This question has not yet been tested in a Nordic welfare state.

Objective: This study evaluates the Finnish Basic Income Experiment (FBIE), focusing on its impact on union formation and dissolution. The FBIE was the first nationwide, non-voluntary randomized experiment on basic income in an advanced economy, conducted from 2017 to 2018. Accordingly, we explore whether reducing administrative barriers, conditionality, and welfare traps among the unemployed affect union dynamics in Finland. We focus on both marriages and cohabiting unions.

Methods: We utilize comprehensive administrative register-based data for both the participants of the experiment (N = 1,999) and their control group (N = 173,042). We estimate the impact of experiment participation using linear probability and Cox proportional hazards models. Our analyses cover the experimental period (2017–2018) and the post-experimental period (2019–2020).

Results: We find no evidence that the FBIE altered union formation or dissolution across measures of any union, marriage, cohabitation, or associated transitions.

Contribution: Modest welfare reforms in advanced welfare systems seem to not alter family formation or dissolution patterns.

Author’s Affiliation

• Outi Sirniö - Terveyden ja hyvinvoinnin laitos (National Institute for Health and Welfare), Finland EMAIL
• Henri Salokangas - Terveyden ja hyvinvoinnin laitos (National Institute for Health and Welfare), Finland EMAIL
• Pasi Moisio - Terveyden ja hyvinvoinnin laitos (National Institute for Health and Welfare), Finland EMAIL
• Heikki Hiilamo - Terveyden ja hyvinvoinnin laitos (National Institute for Health and Welfare), Finland EMAIL

Similar articles in Demographic Research

Fertility timing and the birth squeeze
Volume 54 - Article 40    | Keywords: birth squeeze, cyclical populations, fertility, marriage, marriage squeeze, stable population

Non-intact families and adolescents’ family satisfaction during the Second Demographic Transition: A test of the institutionalization hypothesis
Volume 54 - Article 21    | Keywords: adolescence, divorce, families, family structure, parental separation, satisfaction, single-parent families, union dissolution

Changes in the household expenditure basket in India during COVID-19
Volume 54 - Article 13    | Keywords: consumption, COVID-19, food expenditures, food subsidy, income, nutrition, panel regression

Tracking the decline of first marriage in South Korea: Timing, quantum decline, and pandemic disruptions
Volume 54 - Article 3    | Keywords: COVID-19, marriage, mean age at first marriage, nuptiality, proportion of ever married, South Korea, total first marriage rate

“Family-Anchored” transitions to adult life in Mexico
Volume 54 - Article 2    | Keywords: extended families, family networks, household, Mexico, parenthood, single parenthood, transition to adulthood, union dissolution, unions