Universal Cash Transfers and Labor Market Outcomes

47 Pages Posted: 10 Apr 2019 Last revised: 27 Feb 2020

See all articles by Andrew Bibler

Andrew Bibler

University of Nevada, Las Vegas

Mouhcine Guettabi

Institute of Social and Economic Research

Matthew Reimer

University of California, Davis

Date Written: March 21, 2019

Abstract

One major criticism of universal basic income is that unconditional cash transfers discourage recipients from working. We estimate the causal effects of a universal cash transfer on short-run labor market activity by exploiting the timing and variation of a long-running unconditional and universal transfer: Alaska's Permanent Fund Dividend. We find evidence of both a positive labor demand and negative labor supply response to the transfers, document important heterogeneity across workers, and provide a set of placebo tests supporting our main results. Altogether, a $1,000 increase in the per-person disbursement leads to a 0.7% labor market contraction on an annual basis.

Keywords: Permanent Fund Dividend, Labor Supply, Universal Income

JEL Classification: J2, H24, I38, H53

Suggested Citation

Bibler, Andrew and Guettabi, Mouhcine and Reimer, Matthew, Universal Cash Transfers and Labor Market Outcomes (March 21, 2019). Available at SSRN: https://ssrn.com/abstract=3357230 or http://dx.doi.org/10.2139/ssrn.3357230

Andrew Bibler

University of Nevada, Las Vegas ( email )

United States

Mouhcine Guettabi (Contact Author)

Institute of Social and Economic Research ( email )

3211 Providence Drive
Anchorage, AK 99508
United States
9077865496 (Phone)

Matthew Reimer

University of California, Davis ( email )

CA
United States

HOME PAGE: http://https://are.ucdavis.edu/people/faculty/matthew-reimer/

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