Lottery Wins and Employment in a Low-Income Country: Impacts and Mechanisms

Cuong Nguyen and Tung Phung

Economic Development and Cultural Change, 2024, vol. 73, issue 1, 61 - 86

Abstract: In this study, we examine whether a positive income shock, measured by lottery wins, affects labor supply and the employment of individuals in Vietnam using Vietnam Living Standard Surveys 1993 and 1998. We do not find significant effects of lottery wins on the probability of working or on working hours. However, we find that lottery wins tend to be invested in productive assets and nonfarm household businesses. As a result, individuals from lottery-winning households tend to quit their wage-earning jobs and move to nonfarm self-employment. A 1% increase in lottery winnings results in a 0.22% increase in nonfarm income and a 0.056% increase in per capita income (excluding lottery winnings).

Date: 2024
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