Research Seminars

Exploiting the 1848 revolution in the Austrian Empire, I study how a sudden institutional change impacts economic development. In contrast to much existing research, which focuses on the rule of law and the security of property rights, I argue that the main impact occurred through the expansion of the upper-tail useful human capital (Mokyr, 2005) following the revolution. While the revolution was defeated, important liberalizing reforms persisted in the areas of (i) the press, (ii) technical education and (iii) knowledge-promoting voluntary associations – the information space, for short. Pushing back against the existing consensus that the revolution had no discernible impact on the empire’s economic development, I combine newly collected data on the pre-1848 and post-1848 information space with data on the use and location of steam engines in 1841–1863 to establish the causal link between the post-1848 reforms and the diffusion of this important industrial technology.

This paper investigates whether tax evasion can be beneficial for an optimal income tax schedule. Past theoretical discussions have presented mixed outcomes as to whether allowing taxpayers to opt into uncertainty could indeed enhance overall tax revenues. In this study, we conducted an original real effort experiment in an online labor market with almost 1,000 participants to test this hypothesis empirically. Our findings show significant positive labor supply responses to the opportunity to evade (increased labor supply by 37%). More importantly, the expected tax revenue significantly and substantially increased by up to more than 50%. Strikingly, this effect persists when comparing effective tax rates: Lowering effective tax rates through probabilistic enforcement (the opportunity to evade) is more efficient than simply lowering statutory tax rates. Our findings suggest that the opportunity for tax evasion can increase tax revenues beyond what a corresponding decrease in nominal rates would achieve.

This paper develops a welfare and public economics perspective on optimal policies for carbon removal and storage (CDR) in permanent and non-permanent sinks. Non-permanent CDR reduces mitigation costs, even though the stored carbon is released into the atmosphere eventually. It may serve as bridge technology until permanent CDR becomes available. In contrast to permanent removals, non-permanent CDR does not reduce the optimal long-run temperature level. Its valuation differs from the social cost of carbon since a social cost of carbon removal arises from marginal damages caused by emissions released from non-permanent storage. We discuss three policy regimes that ensure optimal deployment of non-permanent CDR in terms of their informational and institutional requirements for monitoring, liability, and financing.

In today's world, social media is a major source of information for many people. However, not all information on social media is accurate, and misinformation can spread quickly, especially on important topics like climate change. This study aims to examiner how social media message formats (text, picture and video) affect climate change perception and behaviours. A mixed-method study with participants from UK and Mexico was conducted. The study found that misinformation reduces the credibility of social media posts in all formats (text, picture, video). Accurate posts about climate change prompted people to think about taking action to protect the environment. In contrast, misinformation posts made some people believe that climate change is not caused by humans and therefore not their problem to fix. Finally, it was found that higher social media literacy generally helps people recognise misinformation, especially in pictures. However, surprisingly, those with higher social media literacy might find video misinformation more credible. The study significantly advances our understanding of the interplay between message formats, misinformation, and social media's impact on climate change perceptions.

The Paris-Lyon line is the busiest High-Speed Line in Europe and has been open to competition in open access since December 18, 2021. The main objective of the paper is to explore the effects for users with respect to price and frequency compare with the existing literature. The analysis is based on a large database (n = 1243) collected by web scraping from September 2019 to October 2022. The method relies on a descriptive analysis with a similar route without competition (Paris-Bordeaux) in the comparison group. The results highlight an increase of frequency by 15% and a decrease in price by 23%. The prices charged by the newcomer are lower than those of the incumbent (−30% to −50%). The comparison with the control route suggests a positive effect on price that moderates the economic catch-up effect following the COVID-19 pandemic in an inflationary context. More specifically, SNCF appears to take a wait and see attitude to competitive pressure from Trenitalia. It has moderated its prices since the new offer was introduced and has maintained its trains.

The large influx of refugees over recent decades challenges many Western countries to devise effective policies for long-term integration. A key policy question is whether refugee children should be directly integrated into native schools or initially separated into migrant schools. In the Netherlands, refugee children arriving at primary-school age are taught either in integrated or separated schools depending on their randomly assigned municipality, whereas all secondary-school-aged arrivals are initially separated. We exploit this setting in a novel difference-in-differences framework, leveraging rich administrative data. Results indicate that on average, integrated primary schooling increases cultural assimilation as measured by hormonal-contraceptive usage but decreases educational outcomes at age 18. The negative educational effects are restricted to children from disadvantaged backgrounds, whereas the positive assimilation effects are strongest for children from advantaged backgrounds.