The constraint on informal finance is commonly taken to be high costs and limited supply. But the majority of informal investors – family and friends – is often willing to supply funds at negative returns, and yet many borrowers tap family and friends only as a last resort. We explain this...

We use a Swedish sickness insurance reform to show that among married couples a partner’s benefit level affects spousal labour supply. The spousal elasticity of sick days with respect to the partner’s benefit is estimated to be 0.4, which is about one-fourth of the own labor supply...

We provide a cultural explanation to the phenomenon of corruption in the framework of an overlapping generations model with intergenerational transmission of values. We show that the economy has two steady states with different levels of corruption.

We provide a cultural explanation to the phenomenon of corruption in the framework of an overlapping generations model with intergenerational transmission of values. We show that the economy has two steady states with different levels of corruption. The driving force in the equilibrium selection...

We analyze the evolution of cultural traits when parents purposefully invest resources in order to socialize their children to the cultural traits that maximize child lifetime utility. We assume that children are not passive in their adoption of traits from peers. Instead they are guided by an...

We study sex trafficking in a marriage market model of prostitution. When traffickers can coerce women to sell sex, trafficked prostitutes constitute a non-zero share of supply in any unregulated market for sex. We ask if regulation can eradicate trafficking and restore the equilibrium that...