We generalize the classic concept of compensating variation and the welfare compensation principle to a general equilibrium environment with distortionary taxes. We show that the problem of designing a tax reform that compensates the welfare gains and losses induced by an economic disruption can...

We use a simple graphical approach to represent Social Welfare Functions that satisfy Independence of Irrelevant Alternatives and Anonymity. This approach allows us to provide simple and illustrative proofs of May's Theorem, of variants of classic impossibility results, and of a recent result on...

Many economists and educators of diverse political beliefs favor public support for education on the premise that a more educated electorate enhances the quality of democracy. While some earlier studies document an association between schooling and citizenship, little attempt has been made to...

We randomly vary religious identity salience in laboratory subjects to test how identity salience contributes to six hypothesized links from prior literature between religious identity and economic behavior. We find that religious identity salience makes Protestants increase contributions to...

Thinking about tipping provides a novel perspective on finding a way forward in climate negotiations and suggests an alternative to the current framework of negotiating a global agreement on reductions in greenhouse gas emissions. Recent work on non-cooperative games shows games with increasing...

Common resources may be managed with inefficient policies for the sake of equity. We study how rationing the commons shapes the efficiency and equity of resource use, in the context of agricultural groundwater use in Rajasthan, India. We find that rationing binds on input use, such that farmers,...

Firm size follows Zipf's Law, a very fat-tailed distribution that implies a few large firms account for a disproportionate share of overall economic activity. This distribution of firm size is crucial for evaluating the welfare impact of economic policies such as barriers to entry or trade...

Natives benefit from immigration mainly because of production complementarities between immigrant workers and other factors of production, and these benefits are larger when immigrants are sufficiently `different' from the stock of native productive inputs. The available evidence suggests that...

Default contribution rates for 401(k) pension plans powerfully influence workers' choices. Potential causes include opt-out costs, procrastination, inattention, and psychological anchoring. We examine the welfare implications of defaults under each of these theories. We show how the optimal...

This lecture examines the effects of tax policy and social security retirement benefits on capital accumulation and economic welfare. The paper begins by examining how capital income taxes reduce the real return to savers and then discusses the welfare loss of capital income taxation relative to...