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

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.