Mouhcine Guettabi provided an economic overview and answered questions concerning the impact of the governor's proposed budget to members of the Alaska State Senate and House Finance Committees on Thursday, March 7.
Mouhcine's presentation, Budget options: What are the short term effects?, is available for download.
Within the first few weeks after the Alaska Permanent Fund Dividend (PFD) is paid, substance-abuse incidents increase, while property crime decreases. On an annual basis, however, changes in criminal activity associated with the payment are small and estimated costs are a small portion of the total payment, according to a new analysis of the PFD by Brett Watson, Mouhcine Guettabi, and Matthew Reimer of the Institute of Social and Economic Research (ISER).
ISER's Mouhcine Guettabi told attendees at the Alaska State Chamber of Commerce's Fall Forum in Fairbanks, "The future of Alaska economic development will rest on the success of the traditional basic sectors and the pursuit of new opportunities.
A new paper by Cliff Groh, in collaboration with ISER faculty, looks at how the state government has dealt so far with a very big problem: the state's two largest retirement systems for public employees don't have enough money to cover future costs of pensions and benefits for state and local employees when they retire. Since discovering the shortfall in 2003, the state has made special contributions of nearly $7 billion to the retirement systems.
A new paper by ISER researchers Mouhcine Guettabi, Trang Tran, and Linda Leask aims to give some context to to the ongoing debate about how much Alaska's state government should be spending, as it faces big budget deficits. The paper look at state spending in several ways.
As of 2015 (the most recent year for which cross-state data are available), per-person spending by Alaska's state and local governments was twice the national average. But much of that gap is due to Alaska's unique spending programs (PFDs being the largest but not the only one), higher living costs, and federal grants that are twice the U.S. average per person.
Adjusting for Alaska's unique spending and higher living costs, spending per person in Wyoming (another oil-producing state with a small population) was higher than Alaska's in 2015. Spending in North Dakota (another oil-producer with a small population) was within 15% of Alaska's.
Over the 20-year period from 1992 to 2015, real (adjusted for inflation) spending per person in Alaska grew much slower than the national rate—50% compared with 73%. Alaska's spending did grow faster than the national rate in the last years of that period, when oil prices were high.
Download the paper, How Does Spending in Alaska Compare? A grant from Northrim Bank helped fund this research. If you have questions, get in touch with Mouhcine Guettabi, assistant professor of economics at ISER, at mguettabi@alaska.edu or 907-786-5496.
Mouhcine Guettabi and Andrew Bibler, both assistant professors of economics at ISER, recently compared the paychecks of people in private and public sector jobs in Alaska. Using Alaska Department of Labor data from 2001 through 2016, they found:
• Average earnings are higher in the private than the public sector. That's because men earn more than women, and men make up a bigger share of private workers—55%, compared with 43% in the public sector.
• Men who work for state and local governments earn on average about $2,000 less per quarter than men working for private businesses. The reason why is that overall, men who take public-sector jobs start out at considerably lower wages—and their wages don't catch up over time, even though they increase somewhat faster than private wages.
• Women working for state and local governments earn on average about $500 more per quarter than women in private-industry jobs. That's because overall, the starting salaries for women in public and private jobs are similar, and salaries for women in public-sector jobs grow faster as they spend time in their jobs.
Download Public and Private Sector Earnings in Alaska, prepared for the Alaska Department of Administration, by Mouhcine Guettabi and Andrew Bibler. If you have questions, get in touch with Mouhcine Guettabi at mguettabi@alaska.edu or 907-786-5496 or Andrew Bibler at ajbibler@alaska.edu or 907-786-5452.
The state government provides considerable money to Alaska’s local governments—but so far there has been little analysis of how the precipitous decline in state revenues might affect local governments. A new report by Mouhcine Guettabi, an assistant professor of economics at ISER, assesses how much Alaska’s borough governments rely on state aid and considers how vulnerable they are to cuts in that aid.
The author found that overall, boroughs depend much more on state dollars now than they did 10 years ago—the average share of borough revenues coming from the state increased from 12% to 28% between 2005 and 2015. But he also shows that some boroughs rely much more than others on state money—and are therefore more vulnerable to inevitable cuts in state aid.
To learn more, download the report, A Regional Assessment of Borough Government Finances and Employment (PDF, 1.8MB). If you have questions, get in touch with Mouhcine Guettabi at mguettabi@alaska.edu or 907-786-5496.