DP10929 Labor Supply Effects of Winning a Lottery

Author(s): Matteo Picchio, Sigrid Suetens, Jan C. van Ours
Publication Date: November 2015
Keyword(s): income effects, labor supply, lottery players, wealth shocks
JEL(s): J22, J29
Programme Areas: Labour Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=10929

This paper investigates how winning a substantial lottery prize affects labor supply. Analyzing data from Dutch State Lottery winners, we find that earnings are affected but not employment. Lottery prize winners reduce their hours of work but they are not very likely to withdraw from the labor force. We also find that the effects of lottery prizes last for several years and materialize predominantly among young single individuals without children.