Original source
Estimating the Effect of Unearned Income on Labor Earnings, Savings, and Consumption: Evidence from a Survey of Lottery Players (2001)
journal article
Search for this source ↗Permission for School’s use is unestablished.
Used in these cards
Administrative Social Security Data Linkage for Earnings Measurement
"We asked respondents to authorize the release of their Social Security earnings records to us. For those who signed the Social Security release forms, we have accurate earnings records for at least six years preceding and six years following the time of winning."
Age-Dependent Labor Supply Reduction Near Retirement
"Individuals between 55 and 65 at the time of winning the lottery reduce their labor earnings significantly more than younger workers. Looking at the average post-lottery earnings, their MPE is lower by -0.167 (0.070)."
Gender-Invariant Labor Supply Response to Unearned Income
"More surprisingly, we find no significant differences between men and women in terms of the marginal propensity to earn out of unearned income. All estimates of the differences are extremely close to zero, with some negative and some positive estimates, and none is significant for the average of post-lottery years or for any of the post-lottery years separately."
Labor Supply Adjustment Lag
"However, even during the first full year after winning the lottery the estimated MPE is much lower than that in subsequent years, at -0.056 (0.25). After the first post-lottery year, the MPE stabilizes around -0.10 (0.03)."
Marginal Propensity to Consume Durable Goods Out of Unearned Income
"Some of the lottery winnings are spent on cars, with a marginal propensity to consume of 1.4 percent, and housing, with a marginal propensity to consume around 3.7 percent."
Marginal Propensity to Save from Unearned Financial Windfalls
"Adding up the two savings measures leads to similar results, with our preferred estimate of the marginal propensity to save out of unearned income based on the sample without nonwinners and big winners equal to 15.8 percent (5.6 percent)."
Nonlinear Income Effect Across Prize Magnitudes
"Because the distribution of prizes is so skewed, with a minimum of zero, a median yearly prize equal to $32,000 and a maximum equal to $500,000, the few very large observations disproportionally affect the linear regression estimates."
Upfront Unconditional Monetary Incentives in Survey Nonresponse Reduction
"Consistent with Philipson's (1997) findings, the incentive scheme with $10 up front and a promise of $40 more rather than a promise of $50 did lead to a higher response rate (23 versus 16 percent)."