We study the impact of universal and permanent cash transfers on the labor market, using the introduction of the Alaska Permanent Fund Dividend. Since 1982, all Alaskan residents are entitled to a yearly cash dividend from the Alaska Permanent Fund. We use the Current Population Survey and a synthetic control method to show that the dividend had no effect on employment, and increased part-time work by 1.8 percentage points. Theory and prior empirical research suggests that cash transfers decrease household labor supply. We interpret our results as evidence that general equilibrium effects of widespread and permanent transfers tend to offset this labor supply effect, at least on the extensive margin. |
