In recent years, ISER economists have studied various impacts the Alaska Permanent Fund Dividend has on the state and its residents. Brett Watson, Research Assistant Professor of Economics, highlighted some of these studies in a recent interview with Alaska's News Source. He noted that research is ongoing and current studies are looking into the effects of the PFD on mortgage delinquency and maternal health.
Employment. Three papers have examined the effect of the Permanent Fund Dividend on employment and hours. The findings across papers show that the PFD has not had a negative influence on the labor market. In fact, there is evidence of small positive demand responses. Overall, however, the employment-related effects of the dividend are fairly small on annualized basis. Consumption. Early research showed that Alaskans do not change their consumption patterns in the months after the distribution. More recent work using a detailed data set shows that Alaskans spend significantly more on non-durables (such as cosmetics, cleaning products, food, fuel, and other consumables) and services in the month when they receive the dividend payment, and this excess consumption persists over the first quarter after the dividend payment.
Health. Birthweight: The evidence indicates that the PFD has a positive, but modest effect on birth weight. This effect is particularly pronounced for low income mothers. Health benefits extend beyond birth weight. For three-year-olds, there is strong evidence that the PFD reduces obesity.
Poverty. The PFD has resulted in substantial poverty reductions for rural Alaska Natives. These effects have been particularly pronounced for the elderly. Interestingly, the poverty reducing effect of the PFD has declined as regional corporation dividends have increased in size over time.
Income inequality. Perhaps the most unexpected result in this literature is that while the distribution has been shown to reduce poverty, additional evidence suggests that the PFD increases income inequality in both the short and long run.
Crime. In the weeks following the PFD distribution, substance abuse related incidents increase while property crime related events decrease. Additionally, both substance abuse and medical assist instances are increasing in the payment size but there is no evidence that property crime is responsive to fluctuations in the amount.
