This paper studies optimal unemployment benefit levels and optimal proportional income taxrates over the business cycle. Previous research suggests that policy makers should makeunemployment insurance (UI) dependent on the business cycle because the UI system canbe used to smooth consumption...

We conduct a framed field experiment with 245 employed persons (no students) as subjectsand a real tax, which is levied on the subjects’ income from working in our real effort task. Inour first three treatments, the net wage is constant but gross wages are subject to differentconstant marginal...

Several countries have recently abolished or significantly reduced their taxes on bequests.Bequest taxes, on the other hand, were among the first to be introduced when modernsystems of taxation were developed at the end of the nineteenth century. We propose anexplanation for these facts which is...

Barriers to outsourcing that are being currently implemented in the US effectively tax its companies who "export" jobs through outsourcing. The objective is to raise domestic employment. Given that many of the important international markets where the US has a comparative advantage feature...

We examine ways of funding higher education, comparing upfront tuition fees with graduate taxes. The tax dominates, as volatility in future income is transferred from risk-averse students to the risk-neutral state. However, a double moral hazard problem arises when students' efforts to raise...

For policy makers and analysts, it is important to isolate the redistributive impact of tax-benefit policy changes from changes in the environment in which policies operate. When actual reforms are motivated by work incentives, it is also crucial to evaluate behavioural responses and the...

A fat and a healthy good provide immediate gratification, and cause health costs or benefits in the long run, which are misperceived. Additionally, the fat good (healthy good) increases (decreases) health care costs by increasing (decreasing) the probability of suffering from a chronic disease...

This paper employs regression discontinuity methods to identify the effect of formality on Brazilian micro-firm performance. The SIMPLES program introduced in November 1996 consolidated multiple taxes and social security contributions into a single payment and reduced taxes for eligible small...

This paper applies the theory of relational contracts to make precise the idea that because households are engaged in a repeated non-cooperative game, Pareto efficient outcomes can be supported by self interest, given the specific pattern of specialisation and exchange which exists in the...

This paper analyzes educational choices and political support for subsidies to higher education in the presence of a time-consistency problem in income redistribution. There may be political support for so generous subsidization that it motivates the median voter to obtain higher education. As a...