CEBI Research

While the financial secrecy of offshore tax havens has historically created ample tax evasion opportunities for wealthy individuals, automatic information exchange between tax authorities is an ambitious attempt to make tax enforcement possible. This column summarizes recent research documenting that information exchange creates large improvements in tax compliance through repatriation of offshore wealth, self-reporting of offshore financial income and audit efforts targeted offshore evasion.

At both ends of the income scale, opponents of inequality will pay to equalise economic differences in society – as long as it is done publicly. This is shown in a new study from CEBI.

The financial crisis in 2008-10 showed that ill-informed financial decision-making among households have great consequences for the global financial markets.

Studies with null results are perceived to be less publishable, of lower quality, less important, and less precisely estimated than studies with large and statistically significant results, even when holding constant all other study features, including the sample size and the precision of the estimates.

For decades, researchers have been investigating the relationship between incentives and effort. They found that while motivation is essential, strong incentives based on easy-to-measure goals can sometimes lead to unintended negative effects.

Ida Lykke Kristiansen from CEBI and her co-author Sophie Yanying Sheng from University College San Diego have investigated the importance of the match between primary care physicians and patients.

Behavioral responses to taxes are key inputs in evaluations of tax reforms and the trade-off between equity and efficiency in society. A recent paper accepted in Journal of Public Economics by Katrine Jakobsen and Jakob Søgaard, addresses this gap.

What beliefs do people hold about the size of the gender wage gap and factors influencing it? How do these beliefs differ across demographic groups? And to what extent do they influence people’s opinions on whether the government should support women in the labor market through policy-making? A recent paper by Sonja Settele answers these questions through an online survey experiment conducted in the US.

To what extent do households self-insure to avoid cutting back on consumption following income losses, and which self-insurance channels are most important?

How individuals understand their own social position – and how that understanding shapes their stance on inequality more broadly – are questions of longstanding concern to social scientists.

Social distancing laws that close down private businesses are often viewed as sacrificing the economy in order to save lives from Covid-19. Consistent with this view, many countries have experienced huge drops in consumer spending around the time that they went on shutdown.

We document a strong association between patience and wealth inequality by linking experimental data from a large preference-elicitation experiment with administrative wealth records.

House prices and spending move together but little is known about the underlying mechanism linking them. We design a test to discriminate between the housing wealth effect hypothesis and the collateral effect hypothesis.

Inequalities at birth of one generation persist into inequality among the offspring in the next generation: differences in birth weight of parents are associated with differences in school performance of their children.

A new study by Claus Thustrup Kreiner, together with Daniel Reck from LSE and Peer Ebbesen Skov from Auckland University of Technology, measures the impact of youth minimum wages on youth employment.

Reducing gender inequality has become a central motivation for labor market and child-care policy reforms.

Financial trouble has big consequences for individual welfare and for the design of debt relief policies and bankrupcy laws. However, little is known about why some people end up in financial trouble while others do not.

We are aware that the models based on perfectly rational individuals are approximations of real life behavior. What is the size and consequences of the differences between model predictions and real life behavior.

New research results, published by CEBI researchers in Proceedings of the National Academy of Sciences (PNAS), challenge previous findings of huge differences in life expectancy between high and low-income individuals. In real life people don´t necessarily stay poor or stay rich, as assumed in previous research.

Even in famously egalitarian Denmark, there are people who enter adulthood with substantial wealth amassed from transfers throughout childhood. This childhood wealth is a strong predictor of wealth in adulthood.

The focus on top income shares might seem narrow. Why only focus on the top of that, when we have standard measures, such as the Gini coefficient that, capture changes in the entire income distribution?

How is it possible to stimulate the economy when traditional monetary and fiscal policy instruments are exhausted? Using an unprecedented policy tool the Danish government allowed people in 2009 to prematurely withdraw pension funds that were previously collected into individual accounts through a government mandate, thereby letting people spend their own money while leaving the government budget unaffected.

We often hear about the power of personality, and how some traits are beneficial for our careers while others are more harmful. For example, we know that being more conscientious (hard-working, driven, reliable, and organized) is associated with better job performance, and that being nice (more agreeable) does not pay off in wages.

Who evades taxes in developed economies? The question matters a great deal for the study of inequality because scholars typically rely on tax records for distributional information about income and wealth.

Despite considerable gender convergence over time, substantial gender inequality persists in all countries. We show that most of the remaining gender inequality in earnings is due to children.

Was the most recent financial crisis transmitted to the household sector through a reduction in the credit supply? The tightening of credit by banks in financial distress is one among several possible explanations why households slashed consumption in the aftermath of the financial crisis.

Focus: the extreme shock of the death of a spouse. We show that widows, who tend to be secondary earners and face large income losses when their husbands die, increase their labor force participation by more than 11%.

Our answer to this question is both “yes” and “no”: To understand how bequests might affect different measures of inequality, let us consider an example where everyone receives a bequest proportional to their wealth. In that case, the variance of the wealth distribution increases, while wealth shares remain constant. Thus, absolute inequality increases and relative inequality is unchanged.