WSJ - Basic Income and Labor

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_honorentheos
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WSJ - Basic Income and Labor

Post by _honorentheos »

Interesting article in the Wall Street Journal regarding payouts in Alaska that almost everyone gets due to oil development in the state. And, as it explains, how this could tell us something about Universal Basic Income:

https://blogs.wsj.com/economics/2018/02 ... m-working/

People having more money to spend appeared to stimulate the economy, and offset the fact that some people may have been inclined not to work due to the payments. “Those forces seem to be canceling out,” Mr. Jones said.
The world is always full of the sound of waves..but who knows the heart of the sea, a hundred feet down? Who knows it's depth?
~ Eiji Yoshikawa
_honorentheos
_Emeritus
Posts: 11104
Joined: Thu Feb 04, 2010 5:17 am

Re: WSJ - Basic Income and Labor

Post by _honorentheos »

I forget that the WSJ is often behind a paywall. Here is the blog post those who can't access the article:

The annual payments made to every Alaska resident out of the state’s oil wealth haven’t reduced how many of them are employed, according to a new study, potentially alleviating one concern about the idea of guaranteeing every citizen a government-paid basic income.

“We speak to one part of this debate, which is, could this have a huge negative effect on labor supply?” said University of Chicago economist Damon Jones, who co-authored the National Bureau of Economic Research working paper circulated this month with Ioana Marinescu, an economist at the University of Pennsylvania.

People having more money to spend appeared to stimulate the economy, and offset the fact that some people may have been inclined not to work due to the payments. “Those forces seem to be canceling out,” Mr. Jones said.

Economists in Europe and the U.S. have pondered in recent years whether the government should pay citizens enough money to cover the basic costs of life. The idea, sometimes called universal basic income or guaranteed income, is controversial. Advocates say it could fight poverty, replace a patchwork of existing safety-net programs and protect workers facing the possibility of massive job losses due to automation. Critics say it could discourage people from working and worsen inequality while costing far too much.

Voters in Switzerland overwhelmingly rejected the idea in 2016 but economists remain curious about how such a program might work in practice, and pilot projects are underway in various locations around the world.

As it turns out, an unintentional experiment has been happening in the Last Frontier for decades.

Ms. Marinescu and Mr. Jones studied the Alaska Permanent Fund, which invests proceeds from the state’s oil wealth and pays out an annual dividend to almost everyone who lives in Alaska. Eligibility guidelines and the amount paid have varied since the payments began in 1982; in 2017, it was $1,100, meaning a family of four received $4,400 with no strings attached.

That’s smaller than the payments envisioned in many universal basic income schemes. But as part of an experiment, it still has value. Due to its universal nature, “the payment has the potential to affect the functioning of the Alaska economy in general,” Ms. Marinescu said.
The world is always full of the sound of waves..but who knows the heart of the sea, a hundred feet down? Who knows it's depth?
~ Eiji Yoshikawa
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