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Guaranteed Nonlabor Income and Labor Supply: The Effect of the Alaska Permanent Fund Dividend

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  • Feinberg Robert M.

    (American University, Washington, District of Columbia, USA)

  • Kuehn Daniel

    (The Urban Institute, Washington, District of Columbia, USA)

Abstract

One peculiar source of nonlabor income that has not been extensively studied for its effect on labor supply is the Alaska Permanent Fund (APF) dividend. This is somewhat surprising given the recent policy focus on Guaranteed Basic Income programs. An annual lump-sum payment, the Permanent Fund Dividend (PFD) is available to almost all Alaska residents, is clearly exogenous with respect to work effort, and – while relatively predictable – varies over time and across households (since it increases linearly with family size). This paper estimates the nonlabor income elasticity of labor supply using exogenous variation from the Alaskan PFD and data from the American Community Survey (ACS). The analysis finds that men have elasticities between −0.15 and −0.10, depending on the specification. Single women have elasticities between −0.14 and −0.09, while married women have somewhat larger elasticities between −0.18 and −0.11.

Suggested Citation

  • Feinberg Robert M. & Kuehn Daniel, 2018. "Guaranteed Nonlabor Income and Labor Supply: The Effect of the Alaska Permanent Fund Dividend," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 18(3), pages 1-13, July.
    • Handle: RePEc:bpj:bejeap:v:18:y:2018:i:3:p:13:n:10
    DOI: 10.1515/bejeap-2018-0042
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    2. Dimitris Georgarakos & Tullio Jappelli & Geoff Kenny & Luigi Pistaferri, 2023. "Labor Supply Response to Windfall Gains," CSEF Working Papers 682, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    3. Guettabi, Mouhcine & Witman, Allison, 2023. "Universal cash transfers and prescription utilization: Evidence from the Alaska permanent fund dividend," Journal of Health Economics, Elsevier, vol. 90(C).
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    6. Alexander James & Nathaly M. Rivera & Brock Smith, 2022. "Cash Transfer and Voter Turnout," Working Papers wp536, University of Chile, Department of Economics.

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    More about this item

    Keywords

    Alaska Permanent Fund; labor supply; nonlabor income; basic income;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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