The Effect of Wealth on Individual and Household Labor Supply
Auteur : David Cesarini, Erik Lindqvist, Matthew J. Notowidigdo, Robert Östling
Date de publication : 2015
Éditeur : National Bureau of Economic Research
Nombre de pages : 33
Résumé du livre
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.