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

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 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 Reimer

University of California, Davis ( email )

CA
United States

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

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