Working Paper: NBER ID: w24312
Authors: Damon Jones; Ioana Marinescu
Abstract: How would universal and permanent cash transfers affect the labor market? Since 1982, all Alaskan residents have received a yearly cash dividend from the Alaska Permanent Fund. Using data from the Current Population Survey and a synthetic control method, we show that the dividend had no effect on employment, and increased part-time work by 1.8 percentage points (17%). We calibrate expected micro and macro effects of the cash transfer using prior literature, and find our results to be consistent with cash stimulating the local economy — a general equilibrium effect. We further show that non-tradable sectors have a more positive employment response than tradable sectors. Overall, our results suggest that a universal and permanent cash transfer does not significantly decrease aggregate employment.
Keywords: Cash Transfers; Labor Market; Universal Basic Income; Alaska Permanent Fund
JEL Codes: H24; I38; J21; J22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| nontradable sectors (L79) | employment response (J68) |
| tradable sectors (F19) | employment response (J68) |
| Alaska Permanent Fund Dividend (H79) | employment-to-population ratio (J68) |
| Alaska Permanent Fund Dividend (H79) | part-time employment (J22) |
| Alaska Permanent Fund Dividend (H79) | general equilibrium effects (D50) |
| Alaska Permanent Fund Dividend (H79) | aggregate employment (E10) |