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

73 Pages Posted: 22 Feb 2018 Last revised: 6 Jan 2020

See all articles by Damon Jones

Damon Jones

University of Chicago - Harris School of Public Policy

Ioana Elena Marinescu

University of Pennsylvania - School of Social Policy & Practice; National Bureau of Economic Research (NBER)

Multiple version iconThere are 3 versions of this paper

Date Written: February 5, 2018

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: unconditional cash transfer, universal basic income, labor supply, employment

JEL Classification: H24, I38, J21, J22

Suggested Citation

Jones, Damon and Marinescu, Ioana Elena, The Labor Market Impacts of Universal and Permanent Cash Transfers: Evidence from the Alaska Permanent Fund (February 5, 2018). Available at SSRN: https://ssrn.com/abstract=3118343 or http://dx.doi.org/10.2139/ssrn.3118343

Damon Jones

University of Chicago - Harris School of Public Policy ( email )

1155 East 60th Street
Chicago, IL 60637
United States

Ioana Elena Marinescu (Contact Author)

University of Pennsylvania - School of Social Policy & Practice ( email )

3701 Locust Walk
Philadelphia, PA 19104-6214
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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