Economic incentives surrounding fertility: Evidence from Alaska’s permanent fund dividend

Abstract

The Alaska Permanent Fund Dividend provided an incentive that increased fertility. This paper estimates the impact of the dividend transfer on fertility rates in Alaska compared to other states using the synthetic control methodology. For the period from 1982 to 1988, fertility on average increased annually in Alaska by 11.3 births per 1000 women aged 15–44—a 13.1 percent increase over the counterfactual. This was driven by women over 20. Fertility increased for women aged 20–24 by 12.4 percent, those aged 25–34 by 14.3 percent, and those aged 35–44 by 16.9 percent. The paper also finds support that narrowing the gap between births, increase in total fertility rate, and no change in abortion are potential channels for the observed increase in fertility. No change in the fertility for the adolescents combined with no change in abortion suggests that the increase in fertility in Alaska was planned.