COMMENT: Gen Z must fear a guaranteed income | Notice
There was a positive effect: lottery winners are more likely to marry and less prone to divorce.
You might think that living in the countryside and working less isn’t so bad. Working in a lower paying job can sometimes offer other benefits, such as flexibility and time spent with your children. But there are costs.
Working less in a less demanding job often means that you forgo learning new skills and pay increases. It might not be a big deal for middle aged people. But that can leave young people who are still building their careers and learning professional skills in a much worse situation.
Most pay raises come in your 20s and 30s, and if you miss those years, there’s a good chance you won’t be catching up.
Our current social protection system is imperfect. But having the payments contingent on income, age, or even having a child is a better alternative.
First of all, it’s much cheaper because you don’t have to give money to the many people who don’t need it.
Second, the guaranteed money (or the money you get no matter what) is worth much more than income that only pays off part of the time. The more money we give people, the bigger the impact it will have on their behavior, and often not in a good way.
One of the problems with the recent lottery study is that it only tracks winners for several years. Many lottery winners think the windfall will set them up for life, but eventually they file for bankruptcy and are prone to depression and poor health (which is why you should always take the annuity option).