A woman assessing the wealth of a potential husband may observe some, but not all, of his wealth. She may screen, leading to status consumption and wasteful gift giving. The screening activity is costly not only for the potential husband, but also for the woman, as it reduces the wealth of the...

We study the effects of patriotism on tax compliance. In particular, we assume that individuals feel a (random draw of) warm glow from honestly paying their taxes. A higher expected warm glow reduces the government's optimal audit probability and yields higher tax compliance. Second, individuals...

For patriotic citizens, living in their native country is intrinsically preferable compared to living in the diaspora. In this paper, we analyze the implications of such a patriotic lock-in in a world with international migration and redistributive taxation. In a formal model of redistribution...

Against the background of the worldwide financial market and economic crisis, leading German economists urge policymakers to maintain the reform course in labor market policy. The experts warn not to jeopardize the clearly positive effects of the recent reform efforts. The "Petersberg...

We consider redistributional taxation between people with and without human capital if education is endogenous and if individuals differ in their perceptions about own ability. Those who see their ability as low like redistributive taxation because of the transfers it generates. Those who see...

In this paper I consider the desirability of drugs that enhance cognitive abilities in the context of tournaments that are used as optimal labor contracts as in Lazear and Rosen (1981). Such drugs reduce the number of voluntary participants in a tournament, but increase individual and total...

Incomplete information is a commitment device for time consistency problems. In the contextof time consistent labor income taxation privacy can lead to a Pareto superior outcome and increases the effectiveness of public education as a second best policy.

Vor dem Hintergrund der weltweiten Finanzmarkt- und Wirtschaftskrise fordern prominente Ökonomen zum Kurshalten in der deutschen Wirtschafts- und Arbeitsmarktpolitik auf. Die Experten legen einen Katalog mit Handlungsempfehlungen vor, der unter anderem die Korrektur falscher Erwerbsanreize...

This paper considers education investment and public education subsidies in closed and open economies with an extortionary government. The extortionary government in a closed economy has incentives to subsidize education in order to overcome a hold-up problem of time consistent taxation, similar...

Restrictions on work hours are more important in countries with a large welfare state. We show that this empirical observation is consistent with the strategic effects of such restrictions in a welfare state in the context of optimal direct taxation in the tradition of Mirrlees (1971). Our...