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Guaranteed non-labor income and labor supply: the effect of the Alaska Permanent Fund Dividend

Author

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  • Robert M. Feinberg

Abstract

One peculiar source of non-labor income that has not been studied for its effect on labor supply is the Alaska Permanent Fund 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 non-labor income elasticity of labor supply using exogenous variation from the Alaskan PFD and data from the American Community Survey. 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 -0.11, while married women have somewhat larger elasticities between -0.18 and -0.11.

Suggested Citation

  • Robert M. Feinberg, 2018. "Guaranteed non-labor income and labor supply: the effect of the Alaska Permanent Fund Dividend," Working Papers 2018-01, American University, Department of Economics.
    • Handle: RePEc:amu:wpaper:2018-01
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    Cited by:

    1. Breno Braga & Olga Malkova, 2024. "Time to Grow Up? Adult Children as Determinants of Parental Labor Supply," Journal of the European Economic Association, European Economic Association, vol. 22(1), pages 230-262.
    2. Julio López-Laborda & Jaime Vallés-Giménez & Anabel Zarate-Marco, 2024. "Algo más que “tapar agujeros”: efectos de los premios sobre algunas decisiones económicas y personales de los españoles," Studies on the Spanish Economy eee2024-28, FEDEA.
    3. Andrew Bibler & Mouhcine Guettabi & Matthew N. Reimer, 2023. "Universal Cash Transfers and Labor Market Outcomes," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 42(1), pages 198-224, January.
    4. Georgarakos, Dimitris & Jappelli, Tullio & Kenny, Geoff & Pistaferri, Luigi, 2025. "Labor supply response to windfall gains," Journal of Public Economics, Elsevier, vol. 250(C).
    5. Robert M. Feinberg & Daniel Kuehn, 2020. "Does a Guaranteed Basic Income Encourage Entrepreneurship? Evidence from Alaska," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 57(3), pages 607-626, November.
    6. Mikhail Golosov & Michael Graber & Magne Mogstad & David Novgorodsky, 2024. "How Americans Respond to Idiosyncratic and Exogenous Changes in Household Wealth and Unearned Income," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 139(2), pages 1321-1395.
    7. 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).
    8. Alexander James & Nathaly Rivera & Brock Smith, 2022. "Cash Transfers and Voter Turnout," Working Papers 2022-01, University of Alaska Anchorage, Department of Economics.
    9. Melline A. Somers & Ruud J. A. Muffels & Annemarie Kuenn-Nelen, 2025. "(Un)conditional Basic Income and Participation Income: A Review of Its Micro- and Macro-Economic Effects," De Economist, Springer, vol. 173(1), pages 205-244, March.

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    Keywords

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    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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