There are two important problems in welfare benefit programs: the prevalence of welfare fraud, in which ineligible people receive welfare benefits, and incomplete take-up, whereby eligible poor people are reluctant to claim welfare benefits. This study investigates both of these opposing...

This paper bolsters Prescott's (2004) claim that high taxes are responsible for lacklustre labor market performance in continental European countries. We develop a lifecycle model with endogenous skill formation, endogenous labor supply, and endogenous retirement. Labor taxation distorts not...

The paper compares the impact of corporate taxation and social insurance on foreign direct investment (FDI) and unemployment. Four main results are derived: (i) the optimal size of the welfare state depends on the degree of risk-aversion and the unemployment rate as a measure of labor income...

In this paper we highlight aspects related to the links between international migration, foreign tied aid and the welfare state. We model migration as a costly movement from an aid-recipient developing country with low income, poor infrastructure, and no welfare system, towards a rich donor,...

Migration of young workers (as distinct from retirees), even when driven in by the generosity of the welfare state, slows down the trend of increasing dependency ratio. But, even though low-skill migration improves the dependency ratio, it nevertheless burdens the welfare state. Recent studies...

Is politics a lucrative business? The question is approached in this paper, as one of few to quantify the monetary returns to holding political office in a typical developed democracy where parties are the main political actors. By applying a difference-in-difference setting with a carefully...

We develop a model of political competition with endogenous turnout and endogenous platforms. Parties trade off incentivizing their supporters to vote and discouraging the supporters of the competing party from voting. We show that the latter objective is particularly pronounced for a party with...

We study political polarization in a parliamentary setting dominated by strong parties. In addition to examining polarization along the left-right dimension, we consider political divergence between legislators belonging to the same political bloc. Are politicians’ background characteristics...

Does party competition affect political activism? This paper studies the decision of party supporters to join political campaigns. We present a framework that incorporates supporters' instrumental and expressive motives and illustrates that party competition can either increase or decrease party...