AEA RCT Registry

Fields Changed

Registration

Field	Before	After
Abstract	We study the effect of wealth on individual and household labor supply using administrative data for a large sample of lottery players in Sweden. We find that winning a lump-sum lottery prize modestly reduces labor earnings, with pre-tax earnings declines over the first 10 years totaling roughly 10 percent of the prize. Earnings reductions are fairly constant over time and similar by age, gender, education, and pre-win earnings levels. We estimate a dynamic labor supply model and show that it can account for the results both over the life cycle and across the earnings distribution, and we use the estimated model to recover key labor supply elasticities. Lastly, we find larger earnings responses for winners than their spouses, regardless of the gender of the winner; this is inconsistent with unitary household labor supply models which pool exogenous unearned income within the household.	We study the effect of wealth on individual and household labor supply using administrative data for a large sample of lottery players in Sweden. We find that winning a lump-sum lottery prize modestly reduces labor earnings, with pre-tax earnings declines over the first 10 years totaling roughly 10 percent of the prize. Earnings reductions are fairly constant over time and similar by age, gender, education, and pre-win earnings levels. We estimate a dynamic labor supply model and show that it can account for the results both over the life cycle and across the earnings distribution, and we use the estimated model to recover key labor supply elasticities. Lastly, we find larger earnings responses for winners than their spouses, regardless of the gender of the winner; this is inconsistent with unitary household labor supply models which pool exogenous unearned income within the household.
Last Published	October 18, 2016 03:51 AM	October 18, 2016 03:54 AM
Primary Outcomes (End Points)	Lottery Prizes and Individual-Level Labor Earnings: Short-Run and Medium-Run Results Lottery Prizes and Individual-Level Labor Earnings: Short-Run and Medium-Run Results Lottery Prizes and Individual-Level Labor Earnings: Heterogeneity by Type of Lottery Lottery Prizes and Individual-Level Labor Earnings: Alternative Specifications Investigating Nonlinear Responses Lottery Prizes and Individual-Level Labor Earnings: Heterogeneity by Age, Gender, and Level of Education Lottery Prizes and Individual-Level Labor Earnings: Heterogeneity by Pre-Win Earnings Levels Lottery Prizes and Individual-Level Labor Earnings: Changing Employers, Occupation, Industry, and Into Self-Employment Simulation-Based Estimates of Model Parameters - Consumption Weight in Utility - Annual Discount Rate - Hours Constraint Implied Labor Supply Elasticities from Calibrated Model - Effect of lottery prize on total labor earnings over remaining working life [Implied Lifetime Wealth Effect] - Effect of permanent change in wages on total hours worked [Uncompensated (Marshallian) Labor Supply Elasticity] - Effect of transitory change in wages on hours worked [Intertemporal Frisch Elasticity] - Implied Compensated (Hicksian) Labor Supply Elasticity (from (1) and (2) through Slutsky equation) - Implied Lifetime Wealth Effects at Various Ages The Effect of Wealth on Household Labor Earnings The Effect of Wealth on Household Labor Earnings: Testing for Gender Differences	Individual and household labor supply measured by earnings, hours worked and wages 0-10 years after winning the lottery.