Labor supply response to windfall gains

• 成果类型: Article
• 署名作者: Georgarakos, Dimitris; Jappelli, Tullio; Kenny, Geoff; Pistaferri, Luigi
• 署名单位: European Central Bank; Centre for Economic Policy Research - UK; University of Glasgow; University of Naples Federico II; Stanford University; National Bureau of Economic Research
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2025.105476
• 发表日期: 2025
• 关键词: Survey Experiment; labor supply; job search; wealth shocks; Consumer Expectations Survey

摘要

Using a large survey of euro area consumers, we conduct an experiment in which respondents report how they would adjust their labor market participation, hours worked, and job search effort (if not employed) in response to randomly assigned windfall gain scenarios. Windfall gains reduce labor supply, but only when the gains are substantial. At the extensive margin, gains of 25,000 or less have no effects, while gains between 50,000 and 100,000 reduce the probability of working by 1.5 to 3.5 percentage points. At the intensive margin, small gains produce no impact, while gains above 50,000 lead to a reduction of approximately one hour of work per week. The effects among women and workers near retirement are stronger. The share of non-employed respondents who stop or reduce job search intensity declines by 1 percentage point for each 10,000 in windfall gain, with the strongest effects observed among older individuals receiving 100,000.