Universal Cash Transfers and Prescription Utilization: Evidence from the Alaska Permanent Fund Dividend

We investigate the impact of a large, universal cash transfer on prescription utilization. Our identification strategy leverages the Alaksa Permanent Fund Dividend (PFD), which is distributed annually in October and comprises 6% of the average household’s annual income. We study the impact of the PFD on the use of prescription medications using a within-Alaska comparison group and difference-in-differences design. Using the IBM MarketScan Commercial Claims and Encounters Prescription Drug Database, we observe prescriptions for 50,568 commercially-insured individuals who filled prescriptions between 2013 and 2019. We find no effects of the PFD on prescription use overall, by sex and age, or by type and cost of prescription. These findings are useful for understanding the effects of universal cash transfers among individuals with employer-based health insurance.