This paper establishes a causal link from fairness beliefs to perceived economic inequality. I conduct an experiment where participants are asked to estimate various income inequality measures of hypothetical societies. While the true income distributions of the societies remain identical and simple, the description of the societies varies to indicate ``fair” and ``unfair” inequality across respondents. Describing the society as unfair increases the incentivized estimated top 10% income share as much as the actual difference between Denmark and the United States. Other inequality metrics are similarly affected. The findings imply that ideological beliefs fundamentally alter how people perceive economic inequality.

Many economic systems aim to combine economic efficiency, equity, and ecological sustainability. A fundamental question is how important the different dimensions are for the success of a country and to what extent there are trade-offs between them. We survey economists around the world and a representative sample of German citizens regarding their perceptions on the importance of the dimensions and trade-offs. We find that while economists rank efficiency as most important, sustainability and equity are deemed almost as important for the success of a country. In contrast, laypeople most often assign equal weight to all three dimensions. While we find substantial disagreement among economists regarding trade-offs, among the population we find a central tendency bias. This bias seems to be partially driven by educational differences. The differences we find between economists and laypeople may be responsible for the populations’ skepticism towards many solutions proposed by economists.

We bring together the inverse optimal taxation and the fairness literature. We invert a fair tax formula and apply it to tax-benefit schemes in Europe to estimate the implicit degree of compensation for each factor that determines individual well-being. We provide a new way to formalize the intuition that, in a fair society, people should be allowed to benefit more from their efforts than from exogenous characteristics. Our empirical results confirm this intuition. We provide the first estimates of implicit tax rates for different characteristics in 31 European countries using EU-SILC data for the years 2007 - 2018. We find a robust tendency in all countries to compensate more for uncontrollable characteristics compared to the partially controllable ones. We then attempt to calculate which countries currently have fair tax systems. Only the Continental countries France and Luxembourg pass the fairness test, whereas the Baltic and Anglo-Saxon countries perform worst.

This paper addresses the gap in the literature concerning the impact of the Belt and Road Initiative (BRI) infrastructure projects at a regional level. Utilizing a staggered difference-in-differences approach, we analyze the effects of BRI transport infrastructure, including railways, roads, and logistic hubs, on local development. To achieve this, we develop a geographic dataset detailing the timelines of project implementation and completion, and combine it with night light output and population data at the pixel level. Our results indicate a modest increase in population development following project completion, but no significant long-term regional economic growth as measured by nightlight output. Logistic hubs demonstrate greater developmental impacts compared to railways and roads. Overall, this paper contributes to our understanding of the potential effects of transport infrastructure on regional economies.

We analyze how the construction of highways in Switzerland affected the stock, births, deaths, and movements of firms as well as the firm structure at the Swiss municipal level. To do so, we constructed a novel geo-referenced dataset containing all limited companies including information on all members of their board of directors between 1943 and 2003. We exploit the variation in the timing of the access and use a staggered difference-in-differences approach. We find positive and sizable effects on the number of firms in the treated municipalities. Then, we document heterogeneous effects depending on two measures of firm sizes. We also show heterogeneity between municipalities receiving an access to the highways earlier than those receiving it later. Based on the director’s data, we can extend our study to include an analysis of firm networks (through common directors) and how these might have been affected by highway construction.

In 2022, Germany introduced a temporary 9-euro monthly ticket for unlimited local and regional public transport. We investigate its impact on mobility patterns, including increased public transport usage, reduced car traffic, and rail network congestion. Using difference-in-difference and event-study analyses with GPS-based mobility, traffic volume, and rail traffic data, we find limited substitution between transportation modes, a strong increase in leisure train journeys, and notable adverse effects on rail infrastructure quality. These effects dissipate after the ticket’s expiration. Our study suggests caution regarding the expected environmental benefits of nearly fare-free ’go-anywhere’ public transport tickets, which are discussed in several countries.

Le Corbusier’s vision for the modern city was that of bright houses set into green open spaces. Today real estate developers around the world pursue the Corbusian vision of light and air for all. This paper provides both an economic rationale for, and a welfare assessment of, the resulting daylit city. When acquiring an entire city block and then building up on only a fraction of it, modern developers build bright homes. These developers internalize the positive externality of daylighting neighboring houses. Yet opening up blocks (to let daylight in) also perforates streetfronts. These developers fail to internalize another positive neighborhood externality: Now there are fewer ’eyes on the street’, and this reduces neighborhood safety and urbanity. From a welfare perspective, streetfronts become too coarse and city blocks become built up too sparsely. This inefficiency calls for a system of suitable property taxes.

Defense spending accounts for a large share of the budget in many countries, but the value of the resulting public good - national defense – has so far escaped assessment. Much of the literature has instead considered indirect benefits of defense spending. In this paper, we assess the direct welfare effects of defense policy, namely an increase in the security of citizens, by means of a survey-based discrete choice experiment. Drawing on a representative sample of the German population, results suggest substantial willingness to pay for an increase in troop numbers, the establishment of a European army and an improved air defense system. The reintroduction of compulsory military service does not enjoy public support. Results further indicate substantial preference heterogeneity across respondents and policy options which we explore. As such, these findings demonstrate how methods of survey-based, non-market valuation can help to refine research in this area of public policy.

This paper investigates how the war in Ukraine has affected the opinions and values of the Russian population. Using data from the Gallup World Poll and the Levada Center, changes in political support for Putin, willingness to migrate, life satisfaction, future optimism, and attitudes towards the West are analyzed. The focus is on the effects of the full-scale invasion in February 2022 and the impact of the military mobilization of young men in September of the same year. We also use data on Russian war victims to examine potential regional differences in Russia.

Are sanctions bypassed by hiding money offshore? Using bilateral data on bank deposits, we compare how offshore deposits from sanctioned versus non-sanctioned countries develop after the US and EU impose financial sanctions. Financial sanctions against individuals increase offshore deposits as (potential) targets attempt to hide their funds. We additionally analyze an example of such sanctions imposed against Russia in 2014 using a synthetic control approach. Offshore deposits originating from Russia increase substantially.

Much like the exploitation of global trade by the first multinationals, early space commerce has the potential to lead to significant conflict as privateers seek to use force to capture resources from others. Governments currently subsidize research increasing such disruptive capabilities despite the fact that international law makes governments -- not firms -- liable for damages. We show that this can be explained in a setting where the potential possibility of conflict affects the terms of an agreement outlawing them. In essence, by increasing the conflict capabilities of one's own firms, this enables a government to push for a more favorable treaty. We demonstrate that under plausible assumptions, this works to the benefit of technologically-advanced nations. Thus, subsidizing current space activities is likely to cement current international income inequality.

The mentally-ill are at higher risk of needing to use income-support programs. However, psychological evidence suggests poor mental health increases the incidence of administrative burdens, raising concern about whether social assistance programs screen the mentally-ill efficiently. So far, the welfare consequences of such an inefficiency have been undocumented. I use administrative data from the Netherlands and show that eligible people with poor mental health receive social assistance around the same amount as the healthy. My theoretical framework shows that this correlation test is insufficient for characterizing welfare when take-up is driven by need vs ordeal-incidence: both could depend on mental health. I derive sufficient-statistics formulas for marginal welfare effects of changes in the costs and benefits of take-up separately. Administrative burden disproportionately screens out people with poor mental health, but the mentally-ill also value benefits more. These empirical estimates suggests reducing ordeals is about three times better than increasing benefits.

This study provides causal evidence that cash-transfer programs have potential to alleviate the income-health trap in advanced countries. We utilize variation provided by the Finnish basic income experiment which increased the average income of 2,000 randomly selected unemployed by 8–10% during the years 2017–2018. Our estimates imply that the experiment reduced both the use and the costs of psychotropic drugs by 8–11%. While these effects are stronger for less severe mental disorders, the results also suggest a reduction in mental health related specialized care.

This study examines the causal impact of expanding the elderly welfare expenditure in South Korea on the elderly suicide rate, utilizing changes in the Basic Pension system as an instrumental variable. We find that an increase in welfare expenditure significantly lowers suicide rate among those 65+, especially in men over 80. Lastly, our analysis of elderly households’ income and consumption indicates that while total income remained stable, consumption rose following enhanced public income transfers. This implies that stronger public income transfer programs reduce income uncertainty, boost consumption and leisure, and consequently lower the suicide rate.

We examine the health effects of a labor market activation policy, the Youth Job Guarantee, implemented in Sweden in 2007. To estimate the causal effects of this policy on health, we implement an RD-design using the age-eligibility threshold of the policy, together with detailed administrative data on health outcomes including measures of mental health. Health effects could arise indirectly via effects on employment, or directly, e.g., via an improved daily routine. In contrast to most of the existing literature on the health effects of ALMPs, our results indicate that the activation policy did not have clear positive effects on health one year after the start of the unemployment spell, measured by prescribed medication or healthcare visits.

We study a repeated interaction between the purchaser of a health service and a nonaltruistic provider when some aspects of the service are unverifiable or verifiable. We formalize a Pay-for-Performance Relational Contract (P4P-RC) inducing the provider to deliver positive unverifiable quality. With the P4P-RC contract, the incentive of the provider to cheat on the unverifiable (non-contractible) quality makes the purchaser less willing to substitute away unverifiable with verifiable quality. Using political stability as a proxy for a stable interaction, we empirically test the relationship between the level of unverifiable quality and the permanence in charge of the Italian regional governments. We confirm the predictions of the theoretical model and find that unverifiable quality increases in contexts where regional governments are more stable.

This article examines health service provision and disparities in access, focusing on the interplay of tax deductions and the spatial correlation between health demand and private supply. We make two main contributions using detailed municipal-level data and a spatial counterfactual empirical approach. First, we uncover significant territorial variations in health tax expenditure, favouring northern Italian regions over southern ones. Second, we explore how proximity to private versus public health providers influences citizen spending behaviour, particularly in the Italian context. Our geographically weighted analysis reveals strong spatial non-stationarity, highlighting local factors affecting healthcare provision.

Public agencies often take long to pay their suppliers for the goods and services they procure. The payment delay can financially burden firms, affecting their participation and pricing decisions. In this paper, we study a reform in Chile that centralized procurement payments and substantially reduced payment delays for certain buyers in the health sector. We utilize a differences-in-differences design to evaluate its effects. Our preliminary findings suggest that reducing payment delay increased competition in procurement auctions by enhancing the participation of small firms, which is consistent with a model under which liquidity-constrained (smaller) firms face higher financial costs from delayed payments.

This paper examines the dynamic effects of the COVID-19 pandemic on healthcare utilization and its underlying mechanisms, using high-frequency medical claims data (2019-2021) that covers the entire Korean population. Employing an individual fixed-effects model, our findings show substantial reductions in outpatient visits during the COVID-19 period, particularly among patients with mild illnesses. Moreover, we observe significant variations in the effects on healthcare utilization based on individual characteristics and the type of illness. Notably, the decline in the outpatient visits was more pronounced among children under 20, the high-income group, and the unemployed group. However, the decreased outpatient visits among children did not appear to correlate with an increase in ACSC hospitalizations. This may provide suggestive evidence of a reduction in the unnecessary use of medical care following the COVID-19 pandemic.

We examine longevity and its transmission across generations using a unique dataset containing about more than 26 million individuals born between 1880 and 1920. We first document that absolute mobility was high during this period: between 45 and 55 percent of individuals lived longer than their parents, though it was much higher for women than men. Relative measures, on the other hand, show substantially less variation across time and subpopulations. The intergenerational correlation in longevity (a measure of persistence rather than mobility) is 0.09 for both sexes – this low correlation is observed across races, education groups, cohorts and birth states. Finally, we document that the intergenerational persistence of longevity is much smaller than the persistence in socio-economic status. Moreover, correlations in longevity and in education are largely independent of each other, suggesting that mobility in wellbeing was larger than measures of income suggest.

Using Ramadan fasting as a natural experiment, we estimate the long-run impacts of in-utero health and nutrition shocks on adult outcomes. We exploit administrative tax return data comprising the universe of income tax returns filed in Pakistan during 2007–2009. The data allow us to link in-utero Ramadan exposure of individuals with their later life labor market outcomes. We find a robust negative effect of Ramadan exposure on earnings (a lower-bound estimate of around 2–3 percent). The exposed individuals are less likely to be in high-skilled occupations and less likely to be in the top of the income distribution. Using nationally representative survey data we show that our results are unlikely to be driven by

selective timing of conception. We run a household survey to provide the first stage of our results and go beyond the intention-to-treat effects to estimate a local average treatment effect.

This paper studies the impact of austerity measures introduced by the UK government after 2010 on life expectancy and mortality. We combine administrative data sources to create a panel dataset spanning from 2002 to 2019. Using a difference-in-differences strategy, we estimate the effect of cuts to welfare benefits and changes in health expenditure on life expectancy and mortality rates. We find that austerity reduced life expectancy by 2.5 to 5 months by 2019, with women being twice as affected as men. The primary driver of this trend is cuts to welfare benefits, although changes in healthcare spending have a larger effect per pound spent. The results suggest that austerity caused 190,000 excess deaths, or 3 percent of all deaths, between 2010 and 2019. Taking into account the years of life lost, we conclude that the costs of austerity exceeded the benefits derived from reduced public expenditure.

In this paper, we investigate the labor supply effects of living in affordable housing. We develop a new and unique administrative data set of individual labor market biographies linked to subsidized housing projects in five German cities, allowing us to follow individuals over almost 20 years after having moved into the affordable housing unit. Using an event study design, we find that access to affordable housing increases total labor income and decreases the likelihood to be unemployed. We explain these results by four complimentary mechanisms: First, the affordable housing policy reduces negative labor supply incentives of housing benefits. Second, the affordable housing units are considerably closer to the city center and better connected to the urban labor market. Third, the rent subsidy allows workers to invest in their labor-related skills. Fourth, the residential stability provided by affordable housing in Germany likely induces workers and firms to invest in specific human capital.

This paper presents novels evidence regarding the persistent impact of working from home (WFH) on urban real estate. Leveraging data encompassing nearly all property offerings between 2014 and 2023 and WFH potential at the postcode level in 50 German metropolitan regions, we observe a gradual and sustained decrease in price premiums for proximity to urban centers since the onset of the pandemic. Our identification strategy exploits the spatially differential exposure to the WFH shock induced by Covid-19, finding that WFH significantly contributes to the observed decline in premiums. The impact is more pronounced in larger metropolitan areas. Our analysis shows that demand-side mechanisms drive the WFH effect, encompassing out-migration to remote areas, increased employment growth in the periphery, and higher valuations of larger properties. Our findings underscore the substantial implications of WFH for future urban planning and housing policies, particularly in city centers.

Place-based policies that allocate resources to specific areas inadvertently also designate these areas as needing assistance, potentially leading to the development of neighbourhood stigma. The common coupling of resource allocation and area designation makes it difficult to measure the stigma effect. However, the Swedish police’s listing of ”vulnerable” neighbourhoods, introduced in 2015, lacked accompanying resources, offering a unique opportunity to examine the isolated impact of place-based policies on stigma. We study the stigma from unfavourable area labels through an analysis of how the police list affected housing prices - a reliable measure of location value. Employing the synthetic control method, we find that the list resulted in an average price decrease of 3.7% within one year and 6.5% within six years in the designated neighbourhoods. In line with ideas of racial stigma, we also find that areas with a higher proportion of minority residents before classification experienced more pronounced negative effects.