It turns out that giving people free money works out pretty well for them — and has little effect on whether or not they quit their job.
A new study from the left-leaning Roosevelt Institute looked at research on the effects of situations in which people get given free money with no strings attached. The study, authored by Ioana Marinescu, an assistant professor at the University of Chicago, found that people who received these “windfalls of cash,” typically do not drop out of the workforce.
In the case of lottery winners, a study drawing on a sample winners in Sweden concluded that while some reduced the number of hours they worked, the majority remained actively employed. It found, on average, that every $100 increase in income from lottery winnings led to an $11 decrease in earnings from working.
“Winning $140,000 decreases the probability of working by about 2 percentage points from a baseline of 77 percent, and the effect is entirely gone after 10 years,” it found.
Lottery winners also decrease hours worked by an average of just one hour per week, it found.