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

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  • Damon Jones
  • Ioana Marinescu

Abstract

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.

Suggested Citation

  • Damon Jones & Ioana Marinescu, 2022. "The Labor Market Impacts of Universal and Permanent Cash Transfers: Evidence from the Alaska Permanent Fund," American Economic Journal: Economic Policy, American Economic Association, vol. 14(2), pages 315-340, May.
    • Handle: RePEc:aea:aejpol:v:14:y:2022:i:2:p:315-40
    DOI: 10.1257/pol.20190299
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    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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