The Effects of Per Capita Tribal Payments on the Fertility, Education, and Labor Force Participation of Tribal Members

Abstract

The purpose of this research is to provide a preliminary examination of the effects of per capita tribal payments on the decision making of tribal members. Standard microeconomic theory suggests that unearned income changes the labor-leisure tradeoff in utility maximization models. While the results of per capita payments on hours of work can be easily anticipated, the effects of these payments on human capital accumulation and family size are more ambiguous. Using Census data from 1990 and 2000 we shed some light on the impact of these per capita tribal payments on the lives of the recipients. We concentrate on three tribes in the state of Michigan: the Saginaw Chippewa Tribe, the Keweenaw Bay Indian Community, and the Pokagon Band of Potawatomi Indians of Michigan. The results lend support to the basic labor theory conclusion that an increase in nonlabor income causes individuals to decrease their work efforts. There is also weak evidence that the payment of per capita payments from casino profits is increasing the fertility rate of Saginaw Chippewa tribal families.