More than just “plugging leaks”: the effects of gambling and lottery winnings on Spaniards’ financial and personal decisions

The paper analyses how winning money from gambling and lotteries in Spain has affected the behaviour of the winners and their partners in a wide range of financial and personal decisions. This is the first study in the literature to apply the differences-in-differences estimator of de Chaisemartin and d’Haultfoeuille (De Chaisemartin, C. and X. D’Haultfoeuille (2024): “Differences-in-differences estimators of intertemporal treatment effects”, The Review of Economic and Statistics, accepted: 1–45.) to this topic. The analysis utilises microdata from the Household Panel published by Spain’s Finance Ministry for 2016–2021. The findings reveal a significant response in the labour supply in the intensive and extensive margin. The prizewinners’ response significantly depends on such factors as the amount of the prize, the prizewinner’s income, and their personal and family circumstances. The prize money is used to invest in property and financial assets (especially the usual dwelling and in investment funds), and in some cases, to pay off debts. Finally, winnings seem to encourage people to get married (and, to a lesser extent, to end their marriage), but not to have children, or change the town they live in.