Almost all theoretical work on how to calculate the marginal deadweight loss has been done for linear taxes and for variations in linear budget constraints. This is quite surprising since most income tax systems are nonlinear, generating nonlinear budget constraints. Instead of developing the...

This is a theoretical study of human-capital accumulation, where parental, as well as public investments are essential. Policy influence rich and poor parents differently when they make educational decisions. Rich parents allocate resources efficiently between physical bequests and educational...

I document a strong negative cross-country correlation between intergenerational earnings persistence and tax progressivity, and between intergenerational earnings persistence and public expenditure on tertiary education. To explain these correlations I then develop an intergenerational...

Poor heath, large acute and long-term care medical expenses, and spousal death are significant drivers of impoverishment among retirees. We document these facts and build a rich, overlapping generations model that reproduces them. We use the model to assess the incentive and welfare effects of...

Half of U.S. 50-year-olds will experience a nursing home (NH) stay before they die, and a sizeable fraction will incur out-of-pocket expenses in excess of $200,000. Given the extent of NH risk, it is surprising that only about 10 percent of individuals over age 62 have private long-term care...

The desirability of inheritance and gift taxes depends on individuals' tax responsiveness. This paper demonstrates how strongly, and in what way, the German inheritance and gift tax influences taxpayer behavior. To that end, it combines administrative data with cross-bracket tax variation: a...

As country after country in the European Union is called to respond to the current challenge of our time - high inflation and declining real wages - governments must engage in a transformative agenda and go beyond emergency energy vouchers and income support cashtransfers. And if the goal is to...

This paper examines two key aspects of unemployment-its propagation mechanism and socioeconomic costs. It identifies a key feature of this macroeconomic phenomenon: it behaves like a disease. A detailed assessment of the transmission mechanism and the existing pecuniary and nonpecuniary costs of...