Labor economics----life cycle labour supply
The life cycle model of labour supply suggests that people who have experienced a large, unanticipated shock to their non-human wealth should work less
than similar people who did not. For instance, a person who just won the lottery should work less in the future than someone else who did not. However, a
recent paper by Furaker and Hedenus [2012] (pdf on Blackboard) found quite ambiguous results for the effect of winning the lottery on work behavior
among Swedes.
Can their findings be reconciled with the life cycle labour-leisure model we studied?
If not, how would we have to modify the model to explain their findings?