Short-Term Labor Responses to Unconditional Cash Transfers

49 Pages Posted: 10 Apr 2019

See all articles by Andrew Bibler

Andrew Bibler

University of Alaska Anchorage, Institute of Social and Economic Research; University of Alaska Anchorage - Department of Economics

Mouhcine Guettabi

Institute of Social and Economic Research

Matthew N Reimer

University of Alaska Anchorage - Institute of Social and Economic Research

Date Written: March 21, 2019

Abstract

One major criticism of Universal Basic Income (UBI) 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. Altogether, a $1,000 increase in the per-person disbursement leads to a 0.2% labor-market contraction on an annual basis, suggesting that concerns over adverse labor market impacts from modest universal transfers may be overstated.

Keywords: Permanent Fund Dividend, labor supply, universal income

JEL Classification: J2, H24, I38, H53

Suggested Citation

Bibler, Andrew and Guettabi, Mouhcine and Reimer, Matthew N, Short-Term Labor Responses to Unconditional Cash Transfers (March 21, 2019). Available at SSRN: https://ssrn.com/abstract=3357230 or http://dx.doi.org/10.2139/ssrn.3357230

Andrew Bibler

University of Alaska Anchorage, Institute of Social and Economic Research ( email )

3211 Providence Dr, BOC 3-301
Anchorage, AK 99508
United States

University of Alaska Anchorage - Department of Economics ( 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 N Reimer

University of Alaska Anchorage - Institute of Social and Economic Research ( email )

United States

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