The Permanent Fund Dividend in Alaska

The Alaska Dividend, properly called the Permanent Fund Dividend (PFD), is the closest thing to a basic income guarantee that exists in the world today (Goldsmith, 2012). It is a small, yearly dividend, financed indirectly from oil revenues, paid since 1982 by the state government to every citizen who lives in Alaska - including all men, women, and children. There are a few conditions: a stay of more than one year in the state, a clean criminal record and the intention to continue to remain in Alaska. In 2015 this payment amounted to $2072 (APFC, 2015).

There are only few studies of the effects of the dividend. Whatever the pattern of purchases and consumption over time, most of the cash from dividends ultimately finds its way back into the Alaska economy to increase employment, population, and income. A rough estimate of the total (direct and indirect) macroeconomic effects of this increase in purchasing power is 10 thousand additional jobs, 15 to 20 thousand additional residents (drawn to the state because of the jobs), and $1.5 billion in additional personal income (Goldsmith, 2012).

Consequently as an addition to the “safety net” the dividend has been one factor in the decline in the official poverty rate since Alaska attained statehood, particularly among Native Americans. The Native American poverty rate fell from 25 percent to 19 percent between the census years of 1980 and 1990 (Goldsmith, 2012).