The checks qualified Alaskans receive each year give residents some extra cash. But the Permanent Fund Dividend, or PFD, could have broader impacts, too.
Researchers at the University of Alaska’s Institute of Social and Economic Research are looking at some of the socioeconomic effects of the PFD. The research is motivated, in part, by interest in the dividend from outside Alaska.
Mouhcine Guettabi is one of the researchers looking at the PFD’s effect on health, crime, and employment.
Interest from outside Alaska: It’s being looked at as a potential model for a lot of states, countries that are interested in the concept of universal income. Alaskans don’t think about this as a universal income or as a basic income, because it was not meant to be as such. However, it’s the longest-running program that distributes money to its citizens.
As there’s been developments in technology, and as people are concerned more and more about income inequality, universal income has been proposed by different factions. There are some that think it could replace welfare programs. There are others that think because of the rapid rise in technology, robots are going to take all our jobs. And that we need to find a way for people to have their basic necessities paid for. And there are people that think it’s a really good way of solving income inequality.
Impact on employment after PFD distribution: For an additional $1,000, women work an hour less. And men, the share of men that work, increases by about 1.8 percent. Women continue working, but they work fewer hours. But there are more men that actually work or that become employed. So for an additional $1,000, which costs about $600 million or so to the state, that translates to about 2,000 additional jobs in those three months after the distribution.
Crime: In the four weeks after the distribution of the PFD, what we’re calling substance use related incidents increase by about 10 percent. That 10 percent may seem big, but on an annualized basis, it’s a really small increase. There are basically 100 additional incidents that involve some sort of substance.
We find that in the two weeks following the distribution, property crimes decrease by about 8 or 8.5 percent… some people are less likely to engage in criminal activity because they have enough resources. But there is a small, small faction of people for whom the distribution results in engaging in some of these unsavory behaviors, if you will.
The concerns about crime from such distributions are overstated. Because on an annualized basis, these are very small deviations away from the average.
Childhood obesity, looking at three-year-old children: A child that’s born in December will get his or her first PFD by the time they’re 10 months old. If a child is born in January, that child will not get his first PFD until they’re 22 or 23 months old.
We find really big effects. We find that an additional $1,000 for a child that’s born in Alaska results in them being 4.5 percent less likely to be obese…if we extrapolate that to Alaska, that means potentially 500 cases of obesity prevented as a result of this distribution.
We have a program from which we can learn a great deal. Both in terms of shaping policy in state but also in terms of informing these future implementations. Because it’s run for a really long time. One of the areas that I’m really excited about is the effect it’s had on education. We know there are parents that save their children’s PFD and put them in funds to help with their educations. There is an opportunity to potentially learn the extent to which these accumulated PFDs have effected educational outcomes.
Related stories from around the North:
Canada: Employment rate drops in 2018 in Nunavut, east-Arctic Canada, CBC News
Finland: No, Finland’s basic income experiment wasn’t stopped, Yle News
Norway: Norway’s oil fund reaches $1 trillion, The Independent Barents Observer
United States: How alternatives to traditional banking can help rural Alaskans, Alaska Public Media