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3 years ago

Windfall gains reduce labor earnings, taxes, increase consumption for Americans.

How Americans Respond to Idiosyncratic and Exogenous Changes in Household Wealth and Unearned Income
Mikhail Golosov, Michael Graber, Magne Mogstad, David Novgorodsky

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Americans change their behavior when they receive unexpected money like lottery winnings. Getting extra money without working makes people work less, pay less in taxes, and spend more. Richer people reduce their work more than poorer people. The government could change policies like giving everyone a basic income or raising taxes on the rich. More money also affects where people live, when they retire, start families, or change jobs.