How the yearly permanent fund dividend can impact society

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ANCHORAGE (KTUU) The PFD has been around for 37 years, yet there is very little research into its effects beyond bolstering our bank accounts. However, for the past few years, UAA’s Institute of Social and Economic Research has been working to change that.

“We’re picking questions at the intersection of what’s interesting and what’s important, and the things for which we actually have data,” said Professor Mouchine Guetabbi, an Associate Professor of Economics at ISER.

Guetabbi and his colleagues have published several studies about the PFD’s short-term impacts on the economy, crime, and even childhood obesity.

“We find very strong evidence that higher PFDs, or an additional $1,000, is associated with as much as a four-and-a-half percentage point decrease in the probability or the likelihood of a child being obese," Guetabbi said.

In general, the researchers said, the PFD has positive short term effects.

“Basically, for every $100,000,000 in PFD distributions, there are somewhere close to 500 jobs that are created in the few months post-distribution,” said Guetabbi.

Longer-term impacts, though, are more difficult to measure.

“The income tax got eliminated in 1981, and the first PFD was distributed in 1982,” Guetabbi said. “And so, teasing out, or isolating the effect of introducing the PFD from the elimination of the income tax is incredibly difficult.”

Some of the biggest mysteries of the system are yet to be solved.

“The most important question that Alaskans care about the most is one that we haven’t answered,” Guetabbi said. “Which is, how much of the PFD actually sticks in Alaska?”

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