Alaska Permanent Fund Research Articles

Estimating the Effect of a Universal Cash Transfer on Birth Outcomes

Babies in the United States fare worse than their peers in other high-income countries, and their well-being is starkly unequal along socioeconomic and racialized lines. Newborn health predicts adult well-being, making these inequalities consequential. Policymakers and scholars seeking to improve newborn health and reduce inequality have recently looked to direct cash transfers as a viable intervention. We examine the only unconditional cash transfer in the United States, the Alaska Permanent Fund Dividend (PFD), to learn if giving pregnant people money improves their newborns’ health. Alaska has paid its residents a significant dividend annually since 1982. The dividend’s size varies yearly and is exogenous to Alaskans and the local economy, permitting us to make causal claims. After accounting for fertility selection, we find that receiving cash during pregnancy has no meaningful effect on newborn health. Current theory focuses on purchasing power and status mechanisms to delineate how money translates into health. It cannot illuminate this null finding. This case illustrates a weakness with current theory: it does not provide clear expectations for interventions. We propose four components that must be considered in tandem to predict whether proposed interventions will work.

A rising tide that lifts all boats: Long‐term effects of the Alaska Permanent Fund Dividend on poverty

AbstractAlthough not designed as a social program to redistribute income, the Alaska Permanent Fund Dividend (PFD) has been reducing poverty by providing equal annual payments to nearly all state residents for over 40 years. We examine direct effects of the PFD on Alaska poverty rates since 1990, using US Census and American Community Survey Public Use Microdata Sample records to adjust for under‐reporting of children's PFD income in official statistics. We estimate that the PFD reduced the number of Alaskans with incomes below the US poverty threshold by 20%–40%. We measure only a small effect on income distribution: a 0.02 reduction in the Gini coefficient. The effect of the PFD has been even larger for vulnerable populations. The PFD has reduced poverty rates of rural Indigenous Alaskans from 28% to less than 22%, and has played an important role in alleviating poverty among seniors and children. Aside from the special case of 2020, up to 50% more Alaska children—15% instead of 10%—would be living in poor families without PFD income. The poverty‐ameliorating effects of the PFD have lessened somewhat since 2000, as dividend amounts adjusted for inflation have been declining.

Investigating the Relationship Between Unemployment Rate and Alaskas Unique Universal Basic Income

The distribution of the Alaska Permanent Fund Dividend (PFD) has existed for over four decades. Similar to a universal basic income PFD entitles each Alaska resident to an equitable portion of an annual government allocation. This paper examines how Alaskas Permanent Fund Dividend impacted Alaskas unemployment rate before and during the pandemic. It also evaluates the merits of a universal basic income before and during a pandemic. This paper demonstrates a positive association between the unemployment rate and the distribution of the Alaska Permanent Fund Dividend. As unemployment rates increase, the dependence on the additional income offered by the Alaska Permanent Fund Dividend or Universal Basic Income becomes increasingly evident. In other words, the PFD is designed to distribute the state's resource wealth among its residents and appears to function as a stabilizing influence during economic downturns. It serves as a financial safety net for individuals experiencing job losses, potentially alleviating financial strain on both individuals and families, and mitigating the adverse effects linked to elevated unemployment rates.

The Alaska permanent fund dividend increases residential payments for water services

Alaska has the lowest rate of access to in-home water services in the United States.

Economic incentives surrounding fertility: Evidence from Alaska’s permanent fund dividend

The Alaska Permanent Fund Dividend provided an incentive that increased fertility. This paper estimates the impact of the dividend transfer on fertility rates in Alaska compared to other states using the synthetic control methodology. For the period from 1982 to 1988, fertility on average increased annually in Alaska by 11.3 births per 1000 women aged 15–44—a 13.1 percent increase over the counterfactual. This was driven by women over 20. Fertility increased for women aged 20–24 by 12.4 percent, those aged 25–34 by 14.3 percent, and those aged 35–44 by 16.9 percent. The paper also finds support that narrowing the gap between births, increase in total fertility rate, and no change in abortion are potential channels for the observed increase in fertility. No change in the fertility for the adolescents combined with no change in abortion suggests that the increase in fertility in Alaska was planned.

Universal cash transfers and prescription utilization: Evidence from the Alaska permanent fund dividend

We investigate the impact of a large cash transfer on prescription utilization. Our identification strategy leverages the Alaksa Permanent Fund Dividend (PFD), which is distributed annually in October and comprises 6% of the average household's annual income. We study the impact of the PFD on the use of prescription medications using a within-Alaska comparison group and difference-in-differences design. Using the IBM MarketScan Commercial Claims and Encounters Prescription Drug Database, we observe prescriptions for 50,866 commercially-insured individuals who filled prescriptions between 2013 and 2019. We find no changes in prescription use overall and are able to rule out changes larger than 0.5% in the week of the PFD and 1.4% the week after. Subgroup analyses find no changes by patient characteristics, degree of cost sharing, or prescription type. We also conduct a synthetic control analysis using a non-Alaska comparison group and find no effects of the PFD on prescriptions. These findings are useful for understanding liquidity sensitivity for prescription medication and the effects of cash distributions among individuals with employer-based health insurance.

A merely national ‘universal’ basic income and global justice

A merely national ‘universal’ basic income and global justice

The heterogeneous associations of universal cash-payouts with breastfeeding initiation and continuation

Existing health literature documents the benefits of breastfeeding for the first six months of life. Prior research on barriers to breastfeeding has focused on the role of hospital initiatives, return to work, and individual mothers' characteristics. This study uses data from Alaska's Pregnancy Risk Assessment Monitoring System and the Alaska Permanent Fund Dividend, to investigate whether universal income support shapes mothers' breastfeeding behaviors. We find that payouts are associated with increases in breastfeeding initiation and short-term continuation (three months) among a sample of urban Alaskan mothers. These associations differ across mothers' socioeconomic and demographic characteristics (i.e., education, economic status, race, marital status). We contend that this type of income intervention may complement existing efforts to promote breastfeeding by removing financial barriers to breastfeeding.

Sovereign funds: features of their formation and use in the Russian Federation and foreign countries

In this article, the author analyzes the features of several types of sovereign funds in different countries. SWF management acts as the main income of the countries. Since the National Wealth Fund is the main sovereign fund in Russia, the author considers it appropriate to analyze the formation of the fund through the management of sovereign wealth funds in other countries. The article provides a classification of sovereign wealth, according to the theoretical provisions developed by E.A. Levchenko. The author notes that often sovereign funds can perform several functions at once. This is typical for funds in countries such as Kuwait, Norway, and also for the state of Alaska. Further, the author proceeds to consider the State Oil Fund of Norway, the Pension Fund of Norway, highlights their functions and areas of use of their funds. The article emphasizes that the funds of the Pension Fund for the most part can be used to achieve such goals as compensating for a budget deficit or adjusting budget revenues from generation to generation. The author then proceeds to consider the funds of Alaska: the Alaska Permanent Fund and the Constitutional Reserve Budget. It is noted that the directions of use of the funds are determined annually by the governor and the legislature of the state. Also in the article, special attention is paid to the Kuwait Oil Fund. In the final part of the article, the author provides statistical data on the return on the use of the Norwegian Pension Fund, on the shares of return on types of assets, as well as on the distribution of investments from the Alaska Permanent Fund.

Universal Cash Transfers and Labor Market Outcomes

AbstractOne major criticism of Universal Basic Income is that unconditional cash transfers discourage recipients from working. Evidence to date has largely relied on targeted and/or conditional transfer programs. However, it is difficult to draw conclusions from such programs because universal transfers may induce a positive demand shock by distributing cash to a large portion of the population, which may in turn offset any negative labor supply responses. We estimate the causal effects of universal cash transfers on short‐run labor market activity by exploiting the timing and variation in size of a long‐running unconditional and universal transfer: Alaska's Permanent Fund Dividend. We find evidence of both a positive labor demand and negative labor supply response to the transfers. Small negative effects on the number of hours worked are found for women, especially those with young children. In contrast, we find an increase in the probability of employment for males in the months following the distribution. Altogether, a $1,000 increase in the per‐person disbursement leads to a 0.8 percent labor market contraction on an annual basis.

Does a universal basic income affect voter turnout? Evidence from Alaska

AbstractDoes a universal basic income (UBI) affect voter turnout? This article argues that the introduction of an unconditional cash payment—where citizens receive money independent of employment status, age, or indigence—can have a turnout-enhancing effect. I evaluate the argument using the introduction of the Permanent Fund Dividend in Alaska. Differences-in-differences estimates covering November general elections from 1978 to 2000 provide compelling evidence that the Alaskan UBI has a significant positive effect on turnout. The results further suggest that the turnout increase was not a one-off effect but persists over a period of almost 20 years. Thus, a UBI has the potential to positively affect turnout among an entire electorate, adding to the discussion around potential welfare reforms in western democracies.

Universal Cash Transfers and Inflation

By stimulating consumer spending, unconditional cash transfers may increase price levels. In Alaska, residents have received an unconditional cash transfer every year since 1982: the Alaska Permanent Fund Dividend. We measure the impact of the dividend using a synthetic control method, which matches Alaska with similar states prior to the introduction of the dividend. The method does not find a good control group for Alaska, likely because of unusual inflation dynamics around 1982. While there is suggestive evidence of positive inflation and price effects, much uncertainty remains regarding the causal effect of unconditional cash transfers on Alaskan inflation and prices.

The Labor Market Impacts of Universal and Permanent Cash Transfers: Evidence from the Alaska Permanent Fund

Since 1982, all Alaskan residents have received a yearly cash dividend from the Alaska Permanent Fund. Using the Current Population Survey and a synthetic control method, this paper shows that the dividend had no effect on employment and increased part-time work by 1.8 percentage points (17 percent). A calibration of microeconomic and macroeconomic effects suggests that the empirical results are consistent with cash stimulating the local economy—a general equilibrium effect. Nontradable sectors have a more positive employment response than tradable sectors. Overall, the results suggest that a universal and permanent cash transfer does not significantly decrease aggregate employment. (JEL E24, H24, H75, I38, J22, R23)

Examining the Effects of a Universal Cash Transfer on Fertility

Abstract Childbearing is at once deeply personal and shaped by social structure. It is also a site of profound inequality in the United States. Income inequality is an upstream cause of childbearing inequality, yet the evidence of the effect of income on reproduction is inconclusive. Previously, scholars primarily examined the introduction of means-tested relief to families with children. This limits analysis to families in poverty and provides insight only into the presence or absence of a policy. We analyze the Alaska Permanent Fund Dividend, which has provided all Alaskan residents with a substantial annual cash payment since 1982. The amount of the payment varies annually and is exogenous to individual Alaskans’ behavior and the state’s economy. We examine the effect of the cash transfers on fertility and abortion among a large and diverse population that has received varying amounts of money over time. We find the payments increase short-term fertility rates 1 and 2 years after disbursement, particularly among socioeconomically disadvantaged populations. Standardized to the 2010 household size distribution, two average payments relative to two minimum payments would result in a predicted fertility rate increase from 80.03 to 86.53 per 1,000 women age 15–44. The effect is largest for first births. The payments have no effect on the abortion rate. These results indicate the additional income removes economic constraints to reproductive health and autonomy and reduces reproductive inequality.

Universal Cash Transfers and Prescription Utilization: Evidence from the Alaska Permanent Fund Dividend

Universal Cash Transfers and Prescription Utilization: Evidence from the Alaska Permanent Fund Dividend

Socioeconomic Disparities in Parental Spending after Universal Cash Transfers: The Case of the Alaska Dividend

Abstract Parental child-related spending represents an important pathway to promote children’s human capital development and material well-being. It is also, however, a pathway that perpetuates social inequalities given the well-known socioeconomic divide in parental spending on children. Although several studies have documented the extent to which current family income is associated with spending on children, we still know little about the causal effects of additional income on child-related spending across the socioeconomic strata. In this paper, I examine the effects of income gains due to universal and unconditional cash transfers from the Alaska Permanent Fund Dividend on child-related spending. Using longitudinal household expenditure data from the 1996–2015 Consumer Expenditure Surveys, I exploit exogenous variation in the generosity of the Alaska Dividend to estimate short- and long-term disparities in parental expenditures resulting from payouts. Results provide a unique opportunity to compare the behavior of high- and low-income parents after an income boost. I find that low- and middle-income parents use cash transfers to catch up with their more affluent counterparts in the short and long term. Low-income parents are, however, unable to keep up with the long-term increases in child-related spending made by their middle-income counterparts. Implications of results for the reproduction of socioeconomic inequalities and for current and proposed cash-transfer policies are discussed.

An exploratory study of basic income fidelity index

AbstractThere is growing interest in adopting basic income as a new social protection policy in many countries. South Korea is no exception. There have been heated discussions on the benefits and costs of adopting basic income as a universal income support program among policy makers and academics in South Korea. However, one of the problems in the discourse of basic income discussion in South Korea has been a lack of clear definition of basic income. In this study, we develop a basic income fidelity index (BIFI) that can be applied to basic income programs to show how fully a program fits to the basic income concept. Such an index can be useful in making the terminologies and concepts of basic income clearer. We test feasibility of BIFI by applying it to four different case examples of basic income; Alaska Permanent Fund, UK Child Trust Fund, Switzerland’s Basic Income Plan, and Finland’s Basic Income Experiment. We show BIFI can be a useful tool to differentiate various types of basic income. It can be also used to identify strengths and weaknesses of a basic income scheme.

Alaska

The First Regular Session of the thirty-first Alaska Legislature began on January 15, 2019, and ended on May 15, 2019. A First Special Session was held from May 16, 2019, through June 13, 2019, with a Second Special Session following from July 8, 2019, through August 6, 2019. The 2019 legislative session resulted in virtually no oil and gas legislation being passed, as the Alaska Legislature focused primarily on legislation regarding the State budget and the funding of the Permanent Fund Dividend. Despite the uncharacteristic lack of oil and gas legislation, the Legislature addressed the prevalent issue of oil and gas leasing in the Arctic National Wildlife Refuge (“ANWR”) through the passage of Senate Joint Resolution No. 7.

A Bayesian Structural Time Series Analysis of the Effect of Basic Income on Crime: Evidence From the Alaska Permanent Fund

AbstractThis paper examines the impact of Alaska’s Permanent Fund Dividend on crime. The Dividend has been payable annually to state residents since 1982 and is the world’s longest-running example of a basic income. Initially universal, from 1989 onwards eligibility was withdrawn from an increasing proportion of those in prison. A Bayesian structural time series estimator is used to simulate Alaskan crime rates in the counterfactual no-Dividend case. A comparison with actual rates provides an estimate of the Dividend’s impact. This does not provide strong evidence of an effect. However, incorporating information on Dividend amounts suggests the size of payments is important, with larger amounts reducing crime. There is no evidence that this effect is reinforced by the 1989 change to eligibility. The results demonstrate the potential for a basic income to encourage positive outcomes and lend support to payment being universal rather than conditional.

Does a Guaranteed Basic Income Encourage Entrepreneurship? Evidence from Alaska

While the concept has been around for years, recently the policy notion of a “guaranteed basic income (GBI) or universal basic income has had a resurgence of interest. In addition to rationales relating to fairness and response to structural employment shifts due to automation and globalization, another motivation sometimes put forward for these plans is to encourage risk-taking by providing a safety net. One would think this would imply greater entrepreneurial activity if an unsuccessful entrepreneur had the GBI to fall back on. In this paper we investigate a rare long-standing example similar to a GBI in the US, the Alaska Permanent Fund Dividend program. This was not put forth as a GBI and is frankly too small an annual amount to fully allow an individual to rely on these funds, but for a moderate-to-large family the APF can replace a large share of a poverty-level of income. Receipt of the APF also does not preclude a family from receiving other safety net benefits (e.g., food stamps, unemployment compensation), suggesting that the downside risk for a potential entrepreneur may be lower than in other US states. We initially examine trends in small-firm births in Alaska over time from the Census Bureau's Business Dynamics Statistics 1977-2014 before and after the institution of the APF program (the first payment was in 1982) relative to other US states to investigate a possible impact on entrepreneurship, with results suggestive of a positive effect (perhaps wearing off over time). We then turn to micro data to look at changes in self-employment behavior in Alaska, with somewhat similar findings.