America is a-buzz with enthusiasm for cash transfers, that is when the government pays people cash (the stimulus payments, the child tax credits, Andrew Yang’s presidential bid).  

Problem: We know very little about the effects of a universal basic income on outcomes of concern to policymakers, including poverty, educational attainment, health, and gender and racial inequalities.

Richard Nixon’s administration pursued a series of experiments to test the central ideas of cash transfers to large swathes of the population. These experiments, from fifty years ago, are the strongest evidence-base on the effects of such a massive transfer of wealth in a developed country.

Solution: Build an evidence-base by studying the universal cash transfer that has been given to every Alaska resident since 1982. Each year, Alaskan residents receive cash from the state as a part of the Alaska Permanent Fund Dividend program. This is an unusually strong case for research because:

• The program is long-standing with over 35 years to investigate.

• The amount of the transfer varies year-to-year in a way that mimics the random assignment of a randomized control trial (that is, it’s exogenous to individual Alaskan’s behavior and the local economy.)

• The amount of the transfer is large. It often exceeds the value of food stamps to a family of four. Food stamps is a cornerstone of the US welfare system.

• It is universally given to all Alaskans.*

• Alaska participates in the major high-quality data collection in the United States including all vital registries, tax data, crime registries etc.

• Alaskan population is large and diverse.

Lessons from this natural experiment complement the smaller, randomized control trials of cash transfers such as the Stockton Economic Empowerment Demonstration and the Y Combinator research basic income experiment which are currently underway or planned.

You can learn more about this work by visiting the Cash Transfer Lab.

* There are a few exceptions such as felons.