Report: PFD boosts Alaska births

Look around. The person standing next to you could be one of thousands of Alaskans who owe their lives to the Alaska Permanent Fund.

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In a new study, assistant economics professor Ashley Ahrens of the University of Alaska Southeast in Juneau finds that the annual permanent fund dividend checks have increased the birth rate in Alaska.

"I'm pretty confident there has been some effect," he said.

Ahrens said he became curious when he heard of families for whom the annual dividend checks constituted a big part of their cash income. This year's dividend, sent out in direct deposit last week, was $1,107 for every man, woman and child who has lived in Alaska for at least a year.

Three years ago, the dividend was $1,963, so a family of five collected almost $10,000 from the state government. Ahrens said he started to wonder if that incentive had a measurable influence on people's decisions to have kids.

So he collected data on changes in Alaska's birth rates over the past half-century. Using a variable to account for the years in which dividend checks were paid, he plugged the information into a complex mathematical model aimed at identifying predictable patterns. It came up with a statistical relationship between dividends and births.

Alaska's birth rate has steadily declined since 1957, Ahrens said. That's part of a larger trend in industrialized nations. But Ahrens said his model indicates the rate would have gone down more without the permanent fund dividend program, which began in its current form in 1982.

As of 2001, Alaska's birth rate was 17 births per 1,000 people, Ahrens said. He is suggesting three of those 17 can be attributed to the dividend.

Using crude calculations, he figures the increase in birth rate translates to as many as 35,000 Alaskans who were born because of the dividend checks.

Ahrens said he has just started the process of having his colleagues in the academic world review his study and its findings.

"So it may not be worth the paper it is printed on," he said.

He presented his study at the recent Pacific Northwest Regional Economic Conference.

"Basically, nobody stood up and said it was just hogwash," Ahrens said.

Next he wants to refine his figures and attempt to figure out how much those dividend kids have cost the state through providing government services.

Most Alaska economists and population experts contacted last week were reluctant to discuss the study because they had not read it.

But one of those, state demographer Greg Williams, said he thinks the dividend checks would be more likely to affect immediate purchases than "long-term things" like having kids.

Still, University of Alaska Anchorage sociology professor Sharon Araji said she could see the anticipation of another dividend check helping nudge some people into having a child. That would be particularly true of people who already have children and for whom adding another does not bring a "startup cost," she said.

"We always try to weigh our costs and rewards," she said.

But there are, obviously, many other factors that go into a decision to have a child, she said.

No one argues that a check of around $1,000 a year is enough to cover the cost of raising a child. But people who plan their children tend to either consciously or subconsciously weigh the costs versus the benefits when deciding whether to go ahead, said private economist Gregg Erickson of Juneau.

"The dividend means that the costs weigh less," he said.