Alaska’s annual Permanent Fund dividend might be responsible for lowering some types of crime in Anchorage while boosting others, according to a new study from the University of Alaska Anchorage.
Researchers at UAA’s Institute of Social and Economic Research studied 16 years’ worth of Anchorage police reports and found that crimes related to substance abuse, such as driving under the influence and disorderly conduct, rise by about 14 percent the day after the PFD is paid out, and stay elevated at 10 percent for the next four weeks compared to a normal day.
Meanwhile, property crimes, such as theft, decrease by 8 percent in the month after the payment. There was no change in violent crime, researchers said.
Brett Watson, a postdoctoral researcher who co-authored the study, said his team was interested in learning how people behave under a system of universal basic income, where the government provides a standard amount of cash to all its citizens to live on.
The topic has gained interest around the world, but right now, the PFD is the only ongoing program that provides a universal source of no-strings-attached income, researchers said.
“Certainly, one thing you hear around any sort of transfer payment,” whether that payment comes in the form of food stamps, welfare assistance or the PFD, “is that there is concern over how people will spend the money,” Watson said.
What researchers found is that when people have more money, they tend to drink more and steal less, he said.
“If someone normally supplements their income with property crime, when they have that financial constraint relieved, they tend to do that less,” Watson said.
As for the substance-abuse crimes, Watson said, the increase is likely related to the fact that everyone receives the cash on the same day. Drinking is often a social activity, and when a person knows that they and all of their friends have extra income, it can make the day after the payout into a kind of drinking holiday for some, he said.
In terms of the number of substance abuse incidents, PFD payout day falls somewhere between Cinco de Mayo and the Fourth of July, Watson said, though it’s possible that social effect could be prevented if the checks were spread out over the course of the year.
The effect on substance abuse was more drastic when the PFD payout was larger, Watson said, even though the size of the dividend doesn’t seem to affect property crime.
Researchers caution that it’s important to keep the changes in crime in perspective. Watson said his team found that police received an average of 140 additional substance abuse calls in the month after the PFD – out of 12,000 incidents, Watson said. That’s about 1 percent of all calls.
For property crime, the numbers are similar. “PFD calls," as they might be called, represented less than 1 percent of all property crime incidents.
"We consider those effects to be relatively small,” Watson said, and because of that, he doesn’t believe changes in crime are factors that jurisdictions should worry about too much when they consider universal basic income.
ISER researchers are also studying how the dividend affects issues like childhood obesity and people’s work habits, as well as whether it acts as an incentive for people moving to Alaska.