We investigate whether the decision to experiment with novel policies is influenced by electoral incentives. Our empirical setting is the U.S. welfare reform in 1996, which marked the most dramatic shift in social policy since the New Deal. We find that electoral incentives matter: governors...

Divided government is often thought of as causing legislative deadlock. I investigate the link between divided government and economic reforms using a novel data set on welfare reforms in US states between 1978 and 2010. Panel data regressions show that under divided government a US state is...

We assess the concentration and duration of zero tax liabilities and of transfer receipts, using data for households with ten to forty years of observations from the Panel Survey of Income Dynamics. We find that neither is strongly concentrated. Nearly 68% owe no federal tax in at least one...

Social assistance in Germany reduces the incentive to work. TheU. S. Welfare to Work Programme tries to avoid such disincentives. It consists essentially of two elements: the Earned Income Tax Credit (EITC) for employees in low wage occupations and a Workfare model. The EITC and the Workfare...

This paper analyzes the effectiveness of the tax and transfer systems in the European Union and the US to act as an automatic stabilizer in the current economic crisis. We find that automatic stabilizers absorb 38 per cent of a proportional income shock in the EU, compared to 32 per cent in the...

We analyze both the uses side and the sources side incidence of domestic climate policy using an analytical general equilibrium model, taking into account the degree of government program indexing. When transfer programs such as Social Security are explicitly indexed to inflation, higher energy...

Using a large-scale survey of U.S. consumers, we study how the large one-time transfers to individuals from the CARES Act affected their consumption, saving and labor-supply decisions. Most respondents report that they primarily saved or paid down debts with their transfers, with only about 15...

Using a laboratory experiment, we present first evidence that stigmatization through public exposure causally reduces the take-up of an individually beneficial transfer. Our design exogenously varies the informativeness of the take-up decision by varying whether transfer eligibility is based on...

A large fraction of domestically abused women report that their partners interfere with their participation in education and employment. As of yet, mainstream economics has not dealt in any systematic way with this phenomenon and its implications for welfare policy. This paper puts forward a...

Whether observed differences in redistributive policies across countries are the result of differences in social preferences or efficiency constraints is an important question that paves the debate about the optimality of welfare regimes. To shed new light on this question, we estimate labor...