Seminar November 10, 2014

Wealth, Health and Childhood Development: Evidence from Administrative Data on Swedish Lottery Players

Abstract

We exploit the randomized assignment of about a billion dollars in lottery prize money to a large sample of Swedes to estimate the causal impact of wealth on players’ own health and their childrens’ human capital and psychological development. Because the lottery data are obtained from administrative records and linked to population-wide registers, our sample is virtually free from attrition. Our data also include the factors - such as the number of lottery tickets - conditional on which prizes were assigned. The estimated causal effects on all health and child development outcomes are always small and usually estimated with enough precision to rule out effects that are much smaller than non-experimental gradients estimated from cross-sectional data. A possible exception to the overall pattern of null results is that we see suggestive evidence that wealth causes a small reduction in the consumption of drugs prescribed to treat insomnia or anxiety. In our intergenerational analyses, we also see clear evidence of a short run increase in health care utilization.

Contact: Battista Severgnini and Cédric Schneider