We use data from the Finnish polytechnic reform to distinguish between human capital and signalling theories of the value of education. We find that the reform increased the earnings of polytechnic graduates compared with those graduating from the same schools before the reform, as predicted by...

This study addresses changes in the wage structure in Finland between 1977 and 1995, and provides a simple explanation based on the demand for and supply of skills. The single index model of Card and Lemieux (1996) is augmented by incorporating changes in the supply of skills. The augmented...

We evaluate the effects of school choice on segregation using data from an admission reform in the Stockholm upper secondary schools. Before 2000, the students were assigned to their nearest school, but from the fall of 2000, the students can apply to any school within Stockholm and admission...

The theoretical analysis of optimal commodity taxation is advanced, but there is only limited empirical evidence to guide commodity tax policies. With this paper, we contribute to this body of literature by empirically examining, using Finnish consumption data, the relation between working...

The standard theory of optimal income taxation under uncertainty has been developed under the assumption that individuals maximise expected utility. However, prospect theory has now been established as an alternative model of individual behaviour, with empirical support. This paper explores the...