Article Review: Evaluating Alaska’s UBI Program

Critiquing an evaluation of the Alaska Permanent Fund Dividend’s impact on tribal Alaskans for MSSP 629: Research and Evaluation Design at Penn

Purpose of Study

“Resource rents, universal basic income, and poverty among Alaska’s Indigenous peoples” by Matthew Berman (2018) examines the effect of the Alaska Permanent Fund Dividend (PFD) on mitigating poverty for the state’s rural indigenous (Alaska Native) population. The paper begins by defining universal basic income (UBI) and citing previous studies that address UBI’s role in poverty alleviation.

The study’s purpose continues by explaining the Alaska Permanent Fund Dividend in greater detail. This section is thorough and fascinating. The fund, technically a “state sovereign wealth fund” was voted for by Alaska’s citizens in 1976 to distribute oil revenues. 25% of total oil revenues are invested in the fund annually, which now sits at $60 billion, or approximately $80,000 per resident, thanks to prudent investment growth over time. The dividend to residents has varied drastically year-to-year, averaging around $1,000 annually.

Methods

The author focuses specifically on the rural American Indian and Alaska Native (AIAN) people. In 2015, only half of this population’s working age adults were employed and their per-capita income was 52% of the national average (United States Census Bureau, 2016). Rural Native Alaskan schools struggle greatly and this population has a mortality rate 3–4 times higher than the US average (Alaska Department of Education, no date; Day, Provost, & Lanier, 2009). They are one of the most vulnerable groups in America, and therefore, this article is of great importance in understanding whether the PFD is helping economically.

The author uses four time periods to evaluate income, poverty, and the effect of the PFD — 1990, 2000, 2005–2010, and 2011–2015. This information is provided solely from the U.S. Census, first using the Alaska Long-Form Survey Public Use Microdata (PUM) datasets and later using the pooled American Community Surveys. Poverty was defined during each time period by the Census’ classification.

The variables examined the income of residents by race, age, rural/urban, and household composition in a tabular format — first showing the reported poverty rate by group and then the rates based on inclusion and exclusion of the PFD. Berman does note one important limitation of the study being that childhood income was often incorrectly omitted from the Census survey (note that children are eligible for the PFD).

Analytic Techniques

The study was designed to provide a quantitative analysis of the descriptive results from the income sections of the Census data.

The analysis was divided into four stages. The first stage took reported income in relation to the poverty threshold. The second stage determined whether the Alaskan PFD was included in reported income by examining the amounts reported in the interest, rent, or dividends or “other income” sections of the census survey — if it was reported, the author removed the amount to create a standardized class. The third step added the current year PFD to income. The fourth step combined the incomes of related individuals that would qualify as a “social family” to determine household income.

Results

Overall poverty rates for the AIAN population are 2.5 times non-Native Alaskan residents. However, the Alaska PFD has certainly been successful in alleviating poverty for this population. The Native Alaskan population living below the poverty threshold was reduced by 5.3% in 2011–2015 thanks to the Alaskan dividend payment. This marked a decrease from 1990, when 9.1% of the AIAN population benefitted from the PFD.

Over time poverty rates have risen in rural Native Alaskan single-person households, but declined in multiple-adult households. The author cites increased labor-force participation and earnings for married women as the cause. Poverty rates were reduced drastically for Alaska Native seniors, falling from 13.3% to 7.6% because of the payment. For children, the dividend reduced their poverty rate from 32.9% to 24.8%. Save for Native Alaskan elders, all measured cohorts witnessed increases in their population living below the poverty threshold over time, with a marked decrease in the effectiveness of the Alaskan PFD in ameliorating this effect.

The articles’ conclusion is that the Alaskan PFD has certainly helped lift many rural Alaskan Native families from poverty, but that the dividend’s impact has decreased over time.

Critiques

The opening Introduction section is too brief and could benefit by explaining the longer history of UBI in the United States. Universal basic income is more complex than just poverty alleviation — it has outright detractors on the right and critics on the left who argue that it reduces social welfare benefits for the most vulnerable citizens. Berman’s paper could be enhanced by addressing the historical and societal implications of UBI further.

Data sources would have benefitted by providing more information on the sample size for each time period measured. Importantly, there was no regression analysis in this study, which may have been technically feasible and would’ve provided a lot more color than the raw numbers.

Analysis Steps: This section struggles to meet scientific standards re: the author’s process for isolating the PFD recipients.

Results: The main critique of this section was the use of large data tables with various cohorts and the presentation of raw poverty threshold ratios. It would have been beneficial to show the percentage difference before and after the dividend payment and the difference over time, rather than leaving the work to the reader. Also this study would have benefitted from the use of a regression analysis to evaluate the effect of the PFD on certain populations — it may have been a significant benefit for some, but not others. This article does a good job of exploring the application of the universal basic income program in Alaska and its effect on Native residents, however it’s analytic rigor could be enhanced.

Julian Hartwell is a graduate student at the University of Pennsylvania, studying social policy and data science. His research focuses on criminal justice, economic mobility, and education.

Graduate student at the University of Pennsylvania, studying Social Policy and Data Science.

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