Mariana Amorim earned a PhD from Cornell University in 2019 and soon joined the Sociology department at WSU. Her work focuses on family dynamics, intergenerational support over the life course, and social welfare policies. In 2021, Mari published an innovative and important research article in Social Forces that explored the effects of the Alaska Permanent Fund Dividend (PFD) on child-related investments across the socioeconomic spectrum. Her research has garnered attention from not only academics but the broader public as well, such as the Juneau Empire, Spotlight on Poverty and Opportunity, and WSU Insider. It was also a top post on Reddit r/science with nearly 90k upvotes. We chatted with Mari about the origins of this work, its implications, and her research plans moving forward.
Tom: Can you give us some background on your recent article in Social Forces exploring the implications of the Alaska PFD?
Mari: When I was in graduate school, I was doing research on the Earned Income Tax Credit (EITC), which is one of the many policies in the U.S. that benefit working families. Around February, the EITC distributes tax credit to low-income, working families with children. My advisor at the time, Laura Tach, and I were trying to see how families who received the EITC spent on children. We were implicitly comparing their spending decisions with what middle-class and higher-income parents would do with their money, but that’s an inappropriate counterfactual. When we’re making these comparisons, we’re talking about higher-income parents spending their earned income, not money that fell onto their lap. The way people spend money that they receive unexpectedly as a windfall, or regularly but not as part of their income, is different from money that is part of regular earnings. So, we were stuck on this comparison. Also, the EITC is a federal program that benefits all low-income working parents, so we didn’t have low-income working parents that didn’t receive the EITC in order to see the differences in spending between working parents that do and do not receive the money.
While I was struggling with these bigger questions working with the EITC, I came across the Alaska Dividend. The Alaska Dividend is unique because it benefits parents across the income spectrum. So, you receive that money whether you’re working or not, and whether you’re low, medium, or high income. Everybody in your family receives the money, and it is a large amount, even larger than the EITC in certain years. So by looking at the Alaska Dividend I would have a way to actually see how low-income parents spend their money compared to higher-income parents in the same context of receiving a payout that’s not part of their earnings. And because it’s a state program, I could also compare low-income parents in Alaska with other low-income parents in the continental U.S. who did not receive the money. From an analytical standpoint, it was a wonderful opportunity to see how cash payouts can impact families differently across the socioeconomic spectrum, and that’s how I got into the program.
Tom: Where did your personal interest in the topic come from?
Mari: My own interests in the program came from the frustration I felt trying to work with the EITC and my inability to answer the theoretical questions I was interested in. I found out about the program through a professor at Cornell, Kim Weeden, who is Alaskan. One day when I was presenting about the EITC she raised her hand with a question, but it became a description of the Alaskan dividend. After that, I realized that Alaskans love to talk about the PFD, so I started bringing it up with every Alaskan I knew and learned more about the program.
I discovered I could use national data to look at this and the rest is history. It’s a unique program in the U.S. We have several small experiments going on in the country right now that give no-strings-attached money mostly to low-income families; one of the most famous programs that started implementing guaranteed basic income is in Stockton, California, as part of Mayors for a Guaranteed Income. But these experiments are often short lived, they’ve been in place for only a few years, and they often give money just to low-income people. And the people know that the program is going to end, so the money has a different meaning in how they use it. On the other hand, the Alaska PDF has been in place since the ’80s. It is the only program in the whole world that is universal and unconditional. There is nothing like it, and once I discovered it, I realized it was a hidden gem.
Tom: Can you give us a thumbnail sketch of the findings?
Mari: For the paper that I published in Social Forces, I was looking at how parents spend the PFD money immediately after they receive it and over the course of a year after receiving it. I wanted to see specifically if they increase their spending in child-related spending categories. I focused on spending on two material goods: kids’ clothing and electronics. Then I looked at spending on recreation, school, and extracurricular activities and lessons. In the paper I compare low-income Alaskans with low-income Americans outside of Alaska throughout the year and see if they spend differently each month.
The figures are striking. I find that Alaskans and non-Alaskans spend very similarly on children throughout the year, except in October, when the PFD comes out. Then, you see this huge spike in spending among the Alaskan parents, and that suggests that Alaskan parents prioritize spending the PFD on children and they spend a significant portion of the PFD on children.
However, when I look at social class, it seems that low-income and middle-income parents increase their spending in the short term on school, electronics, and clothes. So in the short term, they’re pretty similar. In the long term, over the course of a year, you see bigger increases for middle-income parents than low income. Middle-income parents can increase their spending on children more than low-income parents.
Now, if we look at the high-income parents, we see a significant increase in spending on just clothing, nothing else. That may suggest that high-income parents are already spending all that they want in terms of educational and recreation activities for their children, so receiving the dividend doesn’t change how much they spend on those things. It could also be that high-income parents are saving the money more often than the middle-and low-income parents and that’s part of why we don’t see a bump in current spending. In my current qualitative interviews that’s what I’m finding. The quantitative data couldn’t really address the savings piece, but the qualitative interviews suggest that high-income parents are saving for the future.
The overall conclusion of this paper is that low- and middle-income parents spend more on children when they receive the PFD than high-income parents, and that may be a little bit of them playing catch up. If you compare between low- and middle-income parents, it seems that middle-income parents benefit more from the PFD than low-income parents, which makes sense because lower-income parents are really tight on money and they need to use a big portion of the PFD just to make ends meet. For high-income parents, it doesn’t necessarily suggest that they don’t value their children, but it may suggest that they’re saving money for future spending. And if that’s the case, it may be that this universal cash payout actually mitigates inequalities in spending on children in the short term just to increase them later on, when you’re looking at, for example, spending on college. It could be that it gives a leg up to those high-income parents that are able to save thousands of dollars every year in college accounts for their children.
Tom: I was going to ask about the future. Is it the qualitative interviews?
Mari: Yes, the qualitative work is the present (laughs). I was awarded a new faculty seed grant from WSU and received another grant from NYU. I’m currently collaborating with a colleague, Jeff Sallaz in Arizona. He was doing the same project that I was doing in parallel, so we decided to join forces. Now we are interviewing parents across the socioeconomic spectrum about how they see the PFD, what they plan to do with the PFD and what they actually do with it, and the impact that they see the PFD having on their work, their housing, their health, and their children; and particularly asking about child spending.
So far we’ve done 51 interviews with low-, medium-, and high-income parents. We haven’t finished analyzing the data, but what is striking to me so far is that it seems to match the narrative I have on the quantitative paper, which is that the PFD may be the most relevant right now in terms of helping to address the basic needs and promote mobility among low- and middle-income parents in the present, but it’s really the middle-income parents that have the leeway to invest the PFD in ways that will benefit their children. The low-income parents have all these plans, and it helps them to pay the rent and keep the lights on, but they can’t make the childhood-related investments that they would like. It seems that, for the higher-income parents whom we have talked to, the PFD is less relevant in the present. It’s not something that they count on or care that much about—they just stick it in a college fund or use it to pay down mortgage, things like that. For them, it is just extra money that they’re investing. So there is this different pattern in terms of using the money for survival, mobility, and future investments that we see across the social classes.
Tom: That is interesting. It’s the rich get richer idea?
Mari: I haven’t seen this in my interviews yet, but I hear anecdotally that there are huge PFD parties that rich people throw around the PFD time because they don’t need the money, so they just spend it lavishly.
From a policy standpoint, it’s interesting because making the payout universal creates more support for it. When you make it means tested or put conditions on it, it becomes stigmatized and the taxpayers who pay for it complain more about it. So universality creates wide acceptance of the payout, which politically is beneficial. Also, it does benefit mostly the lower-income parents in really meaningful ways, and it reduces poverty, but there is this nuance regarding inequality that we think less about. In the long term, we’re giving rich parents the ability to save and invest and multiply this money over time. There is a long-term inequality that we’re not measuring or thinking about and is an unintended consequence of UBIs.
Tom: To conclude, I’m curious about your thoughts about the origins of the dividend payout and if this is something you think sociologists consider. Does this work have a connection to environmental sociology?
Mari: It’s an interesting question. Based on my conversations with Alaskans, they don’t think of oil as a bad origin for money. I think the general sense among Alaskans is that this is what our state economy is based on—it’s going to happen one way or the other and it is out of the population’s control—so at least because we’re getting money, we’re benefiting from what’s being extracted from our home.
Another interesting question is what the oil revenues should be used for. It could be used for social services; they could take the oil revenue and put it towards schools, roads, and hospitals, but instead they give it to people. Which produces more social good? Is giving people money the way to go? The answer is complicated. I think some people would say let’s invest in services that benefit everyone, and that’s how I felt initially coming in. But after being in the world of Alaskans for a while, I have mixed feelings about both approaches because Alaska is a unique place, and a portion of its population lives in very remote, rural areas. These people living in rural areas will not benefit from the services that the state can provide. The state will not build roads all the way to those remote areas, and they will not put hospitals or schools in those areas. But the people in those areas benefit immensely from the PFD and a lot of people in those remote areas hunt and fish for a living. Their only source of guaranteed cash comes from the PFD. Of relevance is that Alaskan Natives make up a large part of this rural population. So unintentionally, the PFD is helping to support the Alaskan Natives’ traditional cultures and some subsistence. If the PFD is taken away, those people in remote areas will not benefit from the other services that could be created using that money. So, maybe those are questions to explore another time.