From: Chris Rasch (crasch@openknowledge.org)
Date: Sat Jul 21 2001 - 20:59:11 MDT
Russell Blackford wrote:
> Loree said
>
> >Has there been any study done on the effects of
> >lottery winning? With the prevalence of state
> >sponsored lotteries these days there is certainly a
> >large enough population base to analyze and reach firm
> >conclusions about what the average American would do
> >if "their ship came in."
You may be interested in by book by H. Roy Kaplan, a sociologist now with the
National Conference for Community & Justice in Tampa, Fla: Lottery Winners:
How They Won and How Winning Changed Their Lives.
Also see the article: Inheritance and Sloth by James K. Glassman, in the
October 11, 1999 of Forbes. Some excerpts:
"The parent who leaves his son enormous wealth," [Andrew Carnegie]
wrote in an 1891 essay, "generally deadens the talents and energies of
the son and tempts him to lead a less useful and less worthy life than
he otherwise would."
What happens when someone gets a barrel full of
cash he hasn't earned himself? Does he work less, work the same, or
work more? The answer could affect public-policy issues like taxes,
Social Security and aid to the poor. As Warren Buffett put it, "All
these people who think that food stamps are debilitating and lead to a
cycle of poverty are the same ones who want to leave a ton of money to
their kids." Until recently, it was hard to put the question to a
rigorous academic test, but in 1991, just as he was leaving Washington
for Princeton after a stint as deputy assistant secretary for tax
analysis, economist Harvey Rosen stumbled across the mother lode -- a
fabulous pile of Internal Revenue Service data that allowed him to
perform what was close to a natural experiment, something that had
eluded his colleagues for decades. Along with Douglas Holtz-Eakin, now
at Syracuse, and David Joulfaian, an economist still at the Treasury,
he was able to check the tax returns (confidentially, with no names
disclosed) of 2,500 Americans who received inheritances in 1982 and to
find out whether they were working and how much they were earning
three years later. "Think of it this way," says Rosen from his office
at Princeton. "You are walking along, minding your own business. We
look at you. Then money gets thrown at you. Then we look at you
again. "What we found was that the more you get thrown at you, the
more likely you are to get out of the labor force. And, if you stay in
the labor force, you work less." The research, published in the
Quarterly Journal of Economics in May 1993, concluded that Carnegie
was right. "For example, a single person who receives an inheritance
of about $150,000 is four times more likely to leave the labor force
than a person with an inheritance below $25,000." But the story
doesn't end there. A year later, the trio, using the same data,
published another paper, this time in the Journal of Political
Economy. The second piece of research looked only at entrepreneurs who
received inheritances. The question this time was whether they were
more likely to stay in business for themselves if they received large
bequests. The answer: Yes! The authors found that 32.6% of
entrepreneurs who received small inheritances were out of business
four years later, but the attrition rate fell to 23.5% for those who
received more than $150,000. (These figures are in 1982 dollars; the
equivalent sums today are $43,000 and $260,000.) More striking, the
revenues of companies run by entrepreneurs who received bigger
inheritances grew 20% faster.
This archive was generated by hypermail 2.1.5 : Sat Nov 02 2002 - 08:08:58 MST