Unintended consequences of universal basic income on living arrangements: evidence from the Alaska Permanent Fund Dividend Program

• Main Author: LIEW, Jia Wen
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2024
• Subjects: Universal Basic Income; Alaska Permanent Fund Dividend; Synthetic Control Method; Economics; Income Distribution
• Online Access: https://ink.library.smu.edu.sg/etd_coll/599; https://ink.library.smu.edu.sg/context/etd_coll/article/1597/viewcontent/GPEC_AY2022_MPhil_Jia_Wen_Liew.pdf
• Institution: Singapore Management University

This paper investigates the impact of the Alaska Permanent Fund Dividend (APFD), a form of universal basic income, on family structures. Using the Synthetic Control Method and data from the Annual Social and Economic supplement of the Current Population Survey, I assess how the introduction of the APFD payments in 1982 affected children’s living arrangements, as well as how it affected adults’ marital status and living arrangements. I find that the introduction of the APFD has several significant impacts on family structures. Specifically, female children and especially those aged 13 to 18 in Alaska are more likely to be living with a single mother after the introduction of the APFD, while male children aged 13 to 18 in Alaska are more likely to be living with a single father as compared to those living in the synthetic control state. At the same time, the results on adults’ marital status corroborate with the results on children’s living arrangements as I find that female adults living in Alaska are less likely to be living with a married spouse and to be married compared to those living in the synthetic control state. The gender heterogeneity in results for children’s living arrangements could be explained by Dahl and Moretti’s (2008) observation that divorce is more likely among couples whose first-born is a daughter, while the age heterogeneity could be explained by Shamah’s (2011) observation that mothers have the ability to understand the importance of welfare and protection provision for younger children compared to older children. Overall, the results suggest that the introduction of the APFD may have altered children’s living arrangements through increased marital dissolution such that more children living in Alaska are living and growing up in a single-parent environment. This study contributes to the growing literature on the socio-economic effects of UBI programs and provides valuable insights for policymakers considering the implementation of similar initiatives.