This paper provides empirical evidence about the effect of unearned income on earnings, consumption, and savings. Using an original survey of people playing the lottery in Massachusetts in the mid-1980s, we analyze the effects of the magnitude of lottery prizes on economic behavior. The critical...

Knowledge of the effect of unearned income on economic behavior of individuals in general, and on labor supply in particular, is of great importance to policy makers. Estimation of income effects, however, is a difficult problem because income is not randomly assigned and exogenous changes in...

With panel data important issues can be resolved that can not be addressed with cross--sectional data. A major drawback is that panel data suffer from more severe missing data problems. Adding a sample consisting of new units randomly drawn from the original population as replacements for units...