Source: Futurity, February 26, 2018
Would universal basic income cause people to leave the workforce? New research suggests it would not. …. In a working paper, associate professor Damon Jones of the University of Chicago Harris School of Public Policy and assistant professor Ioana Marinescu of the University of Pennsylvania School of Social Policy and Practice (formerly of the University of Chicago) examined the effect of unconditional cash transfers on labor markets using the Alaska Permanent Fund Dividend—a payout from a diversified portfolio of invested oil reserve royalties, established in 1982. They concluded unconditional cash transfers had no significant effect on employment, yet it increased part-time work. ….
The Labor Market Impacts of Universal and Permanent Cash Transfers: Evidence from the Alaska Permanent Fund
Source: Damon Jones, Ioana Marinescu, National Bureau of Economic Research (NBER), NBER Working Paper No. 24312, February 2018
From the abstract:
What are the effects of universal and permanent cash transfers on the labor market? Since 1982, all Alaskan residents have been entitled to 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 percent). Although theory and prior empirical research suggests that individual 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 effect, at least on the extensive margin. Consistent with this story, we show suggestive evidence that tradable sectors experience employment reductions, while non-tradable sectors do not. Overall, our results suggest that a universal and permanent cash transfer does not significantly decrease aggregate employment.