Essays in Labor Economics

Abstract

One of the central tasks society assigns to economists is to improve tax and social transfer systems. This requires not only thorough theoretical thinking about the optimal design of policies to reach the policy objective, but also deep institutional knowledge and the empirical analysis of existing policies. A key finding is that reactions to policies are strongly context-dependent, meaning that theoretical considerations cannot reliably describe human behavior and smart design solutions are often less effective than expected. In the field of income taxation, for example, taxpayers often do not understand the concept of marginal taxes (e.g. Rees-Jones, 2018), taxpayers react to imaginary tax incentives (e.g. Lardeux, 2023) and small information treatments have strong effects on political preferences (e.g. Stantcheva, 2021). <br /> Therefore, designing efficient incentive schemes requires policymakers to understand the context-specific preferences of households and take into account the fact that households may not understand complex policy rules or incorrectly assess their financial situation. In this thesis, I address these issues by empirically investigating behavioral aspects relevant to the design of policy rules and the understanding of people of policies and their own finances.