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The effect of wealth on household labor supply: evidence from Swedish lotteries
Stockholm University, Faculty of Social Sciences, Institute for International Economic Studies.
2015 (English)Report (Other academic)
Abstract [en]

We study the effect of wealth on labor supply using the randomized assignment of monetary prizes in a large sample of Swedish lottery players. We find winning a lottery prize modestly reduces labor earnings, with the reduction being immediate, persistent, and similar by age, education, and sex. A calibrated dynamic model of individual labor supply implies an average lifetime marginal propensity to earn out of unearned income of -0.11, and labor-supply elasticities in the lower range of previously reported estimates. The earnings response is stronger for winners than their spouses, which is inconsistent with unitary household labor supply models.

Place, publisher, year, edition, pages
Cambridge, 2015. , 33 p.
Series
, NBER Working Paper Series, 21762
National Category
Economics
Identifiers
URN: urn:nbn:se:su:diva-127440OAI: oai:DiVA.org:su-127440DiVA: diva2:909186
Available from: 2016-03-04 Created: 2016-03-04 Last updated: 2016-03-08Bibliographically approved

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Östling, Robert
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Institute for International Economic Studies
Economics

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