We propose a dynamic general equilibrium model with human capital accumulation to evaluate the economic consequences of compulsory services (such as military draft or social services). Our analysis identifies a so far ignored dynamic cost arising from distortions in time allocation over the...

Religious participation is much more widespread in the United States than in Europe, while Europeans tend to view sects more suspiciously than Americans. We propose an explanation for these patterns without assuming differences in preferences or market fundamentals. Religious markets may have...

A relatively high labor-intensity in government-run entities need not imply slack in their organization. Rather, it is a rational reaction to various forms of wage tax advantage that the public sector has over private firms. Even though an unequal tax treatment of public and private sectors...

Reliable institutions - i.e., institutions that live up to the norms that agents expect them to keep - foment cooperative behavior. We experimentally confirm this hypothesis in a public goods game with a salient norm that cooperation was socially demanded and corruption ought not to occur. When...

We analyse tax competition with corporate profit taxes in a common market where tax revenues are allocated according to an apportionment formula. As a general rule, tax competition is sharper the higher is the tax elasticity of the apportionment formula which, in turn, depends on the properties...

This note provides an alternative proof for the equivalence of decreasing absolute prudence (DAP) in the expected utility framework and in a two-parametric approach where utility is a function of the mean and the standard deviation. In addition, we elucidate that the equivalence of DAP and the...

We examine two types of altruism and their implications for voluntary giving. Philanthropists are altruists who wish to enhance the well-being of others, while individuals with merit-good preferences only wish to further the consumption of certain merit goods by others. Philanthropic donors...

We analyse tax competition with corporate income taxes in a common market where tax revenues are allocated according to an apportionment formula. Generally, tax competition is sharper (i.e., equilibrium tax rates are lower) the more tax-elastic is the apportionment formula. This depends on the...

We investigate optimal taxation of lifetime income with and without an option to emigrate during old age. The government sets the rates of deferred taxation and of taxes on interest income. With immobile agents, the optimal policy consists of full deferral of income taxes on savings and full...