Guaranteed Nonlabor Income and Labor Supply: The Effect of the Alaska Permanent Fund Dividend

Guaranteed Nonlabor Income and Labor Supply: The Effect of the Alaska Permanent Fund Dividend AbstractOne peculiar source of nonlabor income that has not been extensively studied for its effect on labor supply is the Alaska Permanent Fund (APF) dividend. This is somewhat surprising given the recent policy focus on Guaranteed Basic Income programs. An annual lump-sum payment, the Permanent Fund Dividend (PFD) is available to almost all Alaska residents, is clearly exogenous with respect to work effort, and – while relatively predictable – varies over time and across households (since it increases linearly with family size). This paper estimates the nonlabor income elasticity of labor supply using exogenous variation from the Alaskan PFD and data from the American Community Survey (ACS). The analysis finds that men have elasticities between −0.15 and −0.10, depending on the specification. Single women have elasticities between −0.14 and −0.09, while married women have somewhat larger elasticities between −0.18 and −0.11. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The B.E. Journal of Economic Analysis & Policy de Gruyter

Guaranteed Nonlabor Income and Labor Supply: The Effect of the Alaska Permanent Fund Dividend

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Publisher
de Gruyter
Copyright
© 2018 Walter de Gruyter GmbH, Berlin/Boston
ISSN
1935-1682
eISSN
1935-1682
DOI
10.1515/bejeap-2018-0042
Publisher site
See Article on Publisher Site

Abstract

AbstractOne peculiar source of nonlabor income that has not been extensively studied for its effect on labor supply is the Alaska Permanent Fund (APF) dividend. This is somewhat surprising given the recent policy focus on Guaranteed Basic Income programs. An annual lump-sum payment, the Permanent Fund Dividend (PFD) is available to almost all Alaska residents, is clearly exogenous with respect to work effort, and – while relatively predictable – varies over time and across households (since it increases linearly with family size). This paper estimates the nonlabor income elasticity of labor supply using exogenous variation from the Alaskan PFD and data from the American Community Survey (ACS). The analysis finds that men have elasticities between −0.15 and −0.10, depending on the specification. Single women have elasticities between −0.14 and −0.09, while married women have somewhat larger elasticities between −0.18 and −0.11.

Journal

The B.E. Journal of Economic Analysis & Policyde Gruyter

Published: Jun 28, 2018

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