Transitory Income Windfalls and Charitable Giving: Evidence from Norwegian Register Data, 1993-2021

Abstract

This paper studies the impact of unearned, transitory income shocks on charitable giving using Norwegian administrative data. We exploit the random timing and size of lottery wins and our long time period (1993 2021) to estimate both short- and longer-term impacts. We find no meaningful effect of small windfalls. Yet, windfalls exceeding $10,000 induce a long-lasting increase in the likelihood to donate, the absolute level of donations and the share of annual income donated (conditional on donating). We show that this is consistent with individuals thinking of large transitory income shocks as a long-term addition to their annual income