By Emma Ockerman
May 18, 2023
The perception that people often succumb to misfortune and bad decision-making after suddenly receiving large amounts of cash isn’t based in fact, researchers said in a report published Thursday by the Roosevelt Institute, a progressive think tank.
That means potential reparations payouts to Black Americans are unlikely to result in reckless spending, financial ruin and reduced labor productivity, the report’s authors wrote after undertaking a review of prior research concerning consumer behavior after lottery windfalls and inheritances, as well as more minor cash transfers through tax refunds and guaranteed-income programs.
“There’s what we really describe as kind of an urban myth … that people who receive lottery winnings squander the money very quickly,” reparations scholar William “Sandy” Darity, a Duke University professor of public policy and economist who co-authored the report, said in an interview. “The best available evidence indicates that that’s not the case.”