When you give Alaskans a universal basic income, they still keep working

A universal basic income (UBI) is at the heart of the debate about how society will organize itself after robots and algorithms do more and more of today’s work. Not everyone agrees how we do this.

One side argues, with some evidence, that giving all citizens a minimum stipend that covers basic needs discourages punching our time cards. Jobs also give us more than just money, they offer purpose and social cohesion.

The other argues this model has us all wrong: Humans desire meaningful work, and a basic income allows them to pursue it through better education, time and flexibility that ultimately benefits society.

A working paper published this month with the National Bureau of Economic Research begins to answer these issues with empirical data. Earlier studies analyzing lottery winners and negative tax experiments in the 1970s found for every 10% increase in unearned income, earned income seemed to fall by about 1%. Those experiments suggested payments created a slight disincentive to work (although those studies suffered from small sample sizes and short time frames, usually three to five years, compared to the universal, long-term coverage envisioned in a UBI).

The study examining the Alaska Permanent Fund calls this into question. The $60.1-billion state fund, established in 1976, collects revenue from Alaska’s oil and mineral leases to fund an annual stipend to Alaskans. Since 1982, the fund has sent a dividend check to every Alaskan resident. In recent years, its been up to $2,072 per person, or $8,288 for a family of four (it was reduced in 2016 amid a budget crisis).

Alaska’s system set up an ideal experiment. Researchers from the University of Chicago and the University of Pennsylvania compared residents’ behavior before and after the dividend to decide what effect the payments had on workforce participation.

They found that full-time employment did not change at all, and the share of Alaskans who worked part-time jobs increased by 17%. . .

via When you give Alaskans a universal basic income, they still keep working — Quartz

2 thoughts on “When you give Alaskans a universal basic income, they still keep working

  1. I was aware of the fact that Alaskans have been getting this for quite some time and no one has declared that the Alaskan people are just lazy, layabouts and so why this wouldn’t work is a mystery to me. It would actually be beneficial because it would relieve the immediate burden on many that are unable to do better because the job they have pays them so little. It could also encourage more startups. I see no downside to this. But, will it come to pass? I see little hope that it will. I would dearly love to be wrong on this.

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  2. I’m a very strong Universal Basic Income proponent, Shelby. A few powerful billionaires have come round to the view that only a UBI can save capitalism at this point (not that I particularly want to save capitalism). With the steady eradication of work, I don’t see that there is any choice. When Americans get to the point, that a critical mass are starving, there will be bread riots – I can definitely promise you that.

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