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

BACKGROUNDEnhancing 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. OBJECTIVEThis 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. METHODSWe 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 postexperimental period (2019-2020).