The large sibling correlations in risky behaviour between siblings raise the possibility that adolescents may directly influence the actions of their brothers or sisters. We assess the extent to which correlations in substance use and selling drugs are causal. Our identification strategy relies...

What shapes the optimal degree of progressivity of the tax and transfer system? On the one hand, a progressive tax system can counteract inequality in initial conditions and substitute for imperfect private insurance against idiosyncratic earnings risk. At the same time, progressivity reduces...

This paper compares partial and general equilibrium effects of alternative financial aid policies intended to promote college participation. We build an overlapping generations life-cycle, heterogeneous-agent, incomplete-markets model with education, labour supply, and consumption/saving...