The Alaska Permanent Fund and Dividend Distribution Program

Abstract

The Alaska Permanent Fund and its associated dividend distribution program are a unique experiment in the intergenerational transfer of wealth and in the redistribution of public funds back to the private sector. This article provides an historic perspective for the establishment of the Alaska Permanent Fund and presents the economic rationales for the dividend distribution program. We argue that dividends in the form of direct cash payments to state residents made from the interest income of the fund have benefited currentAlaskans through higher personal income, higher employment, and mitigated recesscons. Future generations also may benefit from the dividend distribution program due to its role in reducing fiscal illusion and limiting current state spending.

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