Cash Payments and Public Safety: New Research Challenges Old Fears
Direct cash transfer programs are gaining traction across the United States as potential tools for poverty reduction and economic stability. However, these programs often face resistance fueled by concerns about potential misuse of funds. A common argument suggests unrestricted cash could lead to increased spending on harmful substances, resulting in injury or even death. A recent, comprehensive study of Alaska’s long-standing cash transfer program is challenging these assumptions.
Alaska’s Permanent Fund Dividend: A Unique Case Study
Since 1982, Alaska has distributed annual payments to its residents through the Permanent Fund Dividend (PFD). These payments, averaging around $1,000 to $2,000 per person annually, are universal and unconditional – meaning eligibility isn’t tied to income or employment status. This makes the PFD a unique and valuable real-world test case for evaluating the effects of large-scale, unconditional cash transfers.
Researchers from New York University, the University of California San Francisco, and Alaska’s former chief medical officer undertook an 11-year study to investigate whether the PFD correlated with an increase in traumatic injuries or deaths. Their findings, published in the American Journal of Epidemiology, offer compelling evidence to the contrary.
No Evidence of Increased Harm
The study meticulously analyzed data from 2009 to 2019, examining records of traumatic injuries treated in Alaska hospitals and all reported deaths. The results revealed no association between the annual cash payments and an increase in serious traumatic injuries or deaths from unnatural causes. This pattern held true even when focusing on Alaska’s urban areas, suggesting the findings may be applicable beyond the state’s unique context.
“Our long-term study of a state’s population shows no connection between cash transfers and serious injury or death,” explains NYU sociologist Sarah Cowan, founder and executive director of the university’s Cash Transfer Lab.
Anne Zink, Alaska’s chief medical officer from 2019 to 2024, emphasized the importance of data-driven evaluation. “This study provides the kind of population-level evidence that public health officials and policymakers demand when evaluating guaranteed income programs.”
Beyond Alaska: Implications for Future Programs
This research builds on previous studies with mixed results. What sets this study apart is its scope – reviewing all traumatic injuries and deaths statewide over a longer timeframe and assessing a program that encompasses an entire state’s population. This provides a more robust and representative sample than many previous guaranteed income studies.
The findings have significant implications for the growing debate surrounding universal basic income and other cash transfer programs. They suggest that concerns about irresponsible spending leading to harm may be largely unfounded. This could pave the way for wider adoption of these programs as a means of addressing poverty and economic insecurity.
Research also indicates that cash transfers can positively impact child welfare. A study connected to the Alaska Permanent Fund Dividend found that an additional $1,000 family transfer in the first few months of a child’s life reduces the likelihood of a referral to Child Protective Services by age three by 10 percent.
The Labor Market and Cash Transfers
Another area of concern surrounding cash transfers is their potential impact on the labor market. Will people stop working if they receive a guaranteed income? Research on the Alaska Permanent Fund Dividend suggests not. A study by Damon Jones and Ioana Marinescu found that the cash transfers had no impact on the overall employment rate in the state.
Frequently Asked Questions
Do cash transfers encourage irresponsible spending?
The recent study of Alaska’s Permanent Fund Dividend found no evidence to support this claim. There was no correlation between cash payments and increased injury or death rates.
Will cash transfers discourage people from working?
Research on the Alaska Permanent Fund Dividend indicates that cash transfers do not significantly impact employment rates.
How does Alaska’s program differ from other cash transfer programs?
The Alaska Permanent Fund Dividend is unique in its universality and permanence. It is available to all residents regardless of income or employment status, and has been in place since 1982.
What is the average amount of the Alaska Permanent Fund Dividend?
The amount varies annually, but typically ranges from $1,000 to $2,000 per person.
Did you recognize? Alaska’s Permanent Fund Dividend is funded by oil revenue, making it a unique example of a resource-based universal income program.
Pro Tip: When evaluating the potential benefits of cash transfer programs, consider the long-term effects on both individual well-being and community health.
Want to learn more about the impact of cash transfer programs? Explore additional research from the National Bureau of Economic Research.
