We analyze optimal taxation in an economy with monopsonistic labour markets. The individuals, whose only decisions are whether to work, or not, have heterogeneous productivities and opportunity costs of work. Given its preferences for redistribution, the government, which does not observe the...

We show the existence of a twin peaks relation between trust and the size of the welfare state that stems from two opposing forces. Uncivic people support large welfare states because they expect to benefit from them without bearing their costs. But civic individuals support generous benefits...

This paper provides a simple model which explains the choice between permanent and temporary jobs. This model, which incorporates important features of actual employment protection legislations neglected by the economic literature so far, reproduces the main stylized facts about entries into...

This survey reviews the recent research on trust, institutions and economic development. It discusses the various measures of trust and documents the substantial heterogeneity of trust across space and time. The conceptual mechanisms that explain the influence of trust on economic performance...

In this article, we propose a simple model aimed at explaining the extremely short duration of most temporary contracts. This model takes into account an important characteristic of EPL in Continental Europe that has been neglected by the literature so far. We show that a stringent EPL raises...

The general reduction of employer social contributions on low wages is the main employment policy in France with an annual expenditure of about 1 per cent of GDP. This study shows that low skilled jobs in services are the main beneficiaries of this measure. We estimate that removing the part of...

In cross-country data, teaching practices (such as copying from the board versus working on projects together) are related to various dimensions of social capital. In micro-data from three datasets, teaching practices are also strongly correlated with student beliefs about cooperation across...

This article surveys recent research on the relationship between trust and growth. It documents the strong international and interregional heterogeneity of trust. The theoretical mechanisms that explain the influence of trust on economic performance and the empirical methods used to identify the...