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The Review of Economics and Statistics 2025

Lucky to Work

Puja Bhattacharya1; Johanna Mollerstrom2

1 Department of Economics, University of Arkansas, 220 N. McIlroy Ave, Fayetteville, AR 72701, [email protected] · 2 ICES and the Department of Economics, George Mason University and the Research Institute of Industrial Economics (IFN), Stockholm, Sweden, [email protected]

Abstract

Inequalities are often regarded as more acceptable when they reflect differences in effort, rather than differences in luck. However, effort and luck are often intertwined, and luck may decide if an individual can even exert effort. Using survey experiments in the US and Sweden we study situations where luck fully determines whether an agent works. We document that spectators, tasked with redistributing income between agents, grant working agents more earnings and also more utility, than non-workers. This leads to individuals who were unable to work, owing to sheer bad luck, to fall behind both in terms of earnings and welfare.

DOI
10.1162/rest.a.259
Pages
1-44
Language
en
Sources
crossref openalex

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