Current Research
Current Research
Working Papers
Co-authors: Cevat Giray Aksoy, Justyna Klejdysz, Andreas Peichl and Lisa Windsteiger.
This paper is the first to causally identify the effect of language on attitudes and behaviors toward debt. Using observational data, randomized survey experiments, incentivized borrowing-to-invest decisions, and textual analyses, we show that the moral connotations inherent in debt-related language influence how individuals, firms, and policymakers perceive borrowing. In several languages, including German, Dutch, and Swedish, the standard term for “debt” also connotes “guilt.” Leveraging this semantic overlap, we conduct survey experiments embedded in three household surveys across seven countries and one business survey. By randomizing debt-related wording, we find that guilt-connoted language significantly reduces individuals’ willingness to borrow, their approval of public debt, and debt-financing plans among firm managers. This effect extends to an incentivized experiment, in which guilt-laden wording significantly reduces both the probability of borrowing and the amount borrowed. To complement the experimental results, we analyze three decades of German parliamentary speeches and find that politicians who oppose public debt systematically use guilt-connoted terms. A similar pattern emerges in financial advertising: guilt-laden language is concentrated in debt-relief campaigns, while neutral terminology dominates transactional promotions. Together, our findings demonstrate that moral connotations embedded in language shape economic behavior and are strategically employed in political and commercial discourse.
CESifo Working Paper, CEPR Discussion Paper
Pre-analysis plan #1, Pre-analysis plan #2
Featured in Frankfurter Allgemeine Sonntagszeitung, n-tv.de, Reuters
Co-authors: Pablo Zarate, Steven J. Davis, Nicholas Bloom, Jose Maria Barrero and Cevat Giray Aksoy.
We use two surveys to assess why work from home (WFH) varies so much across countries and people. A measure of cultural individualism accounts for about one-third of the cross-country variation in WFH rates. Australia, Canada, the UK, and the US score highly on individualism and WFH rates, whereas Asian countries score low on both. Other factors such as cumulative lockdown stringency, population density, industry mix, and GDP per capita also matter, but they account for less of the variation. When looking across individual workers in the United States, we find that industry mix, population density and lockdown severity help account for current WFH rates, as does the partisan leaning of the county in which the worker resides. We conclude that multiple factors influence WFH rates, and technological feasibility is only one of them.
NBER Working Paper, CESifo Working Paper
Featured in VoxEU, The Economist
Co-authors: Esteban García-Miralles Maximilian Freier Sara Riscado Chrysa Leventi Alberto Mazzon Glenn Abela Laura Lehtonen Laura Boyd Baiba Brusbārde Marion Cochard David Cornille Emanuele Dicarlo Ian Debattista Mar Delgado-Téllez Ludmila Fadejeva Maria Flevotomou Florian Henne Alena Harrer-Bachleitner Viktor Jaszberenyi-Kiraly Max Lay Mauro Mastrogiacomo Tara McIndoe-Calder Mathias Moser Martin Nevicky Andreas Peichl Myroslav Pidkuyko Mojca Roter Frédérique Savignac Andreja Strojan Kastelec Vaidotas Tuzikas Nikos Ventouris Lara Wemans.
This paper presents a comprehensive characterization of “fiscal drag”—the increase in tax revenue that occurs when nominal tax bases grow but nominal parameters of progressive tax legislation are not updated accordingly—across 21 European countries using a microsimulation approach. First, we estimate tax-to-base elasticities, showing that the progressivity built in each country’s personal income tax system induces elas- ticities around 1.7–1.9 for many countries, indicating a potential for large fiscal drag effects. We unpack these elasticities to show stark heterogeneity in their underlying mechanisms (tax brackets or tax deductions and credits), across income sources (labor, capital, self-employment, public benefits), and across the individual income distribu- tion. Second, we extend the analysis beyond these elasticities to study fiscal drag in practice between 2019 and 2023, incorporating observed income growth and legislative changes. We quantify the actual impact of fiscal drag and the extent to which govern- ment policies have offset it, either through indexation or other reforms. Our results provide new insights into the fiscal and distributional effects of fiscal drag in Europe, as well as useful statistics for modeling public finances.
Co-authors: Werner Eichhorst, Annabelle Krause-Pilatus and Max Lay.
This paper studies the crisis resilience of European welfare states. We analyse the capacity of social policy arrangements to contain poverty and inequality and avoid exclusion before, during and after periods of economic shocks. To achieve this goal, the paper takes a broad perspective to include different layers of protective arrangements, notably upstream systems such as unemployment insurance (UI), job retention and employment protection that are complemented by minimum income support (MIS) schemes. Together, these multiple layers play a crucial role in providing income and job protection in situations of crisis. In that respect we also distinguish systematically between regular/permanent policies (automatic stabilisers) and discretionary, typically temporary crisis response measures. We use a mixed-method approach that combines quantitative and qualitative research, such as descriptive and multivariate quantitative analyses and microsimulation methods based on EUROMOD. This is combined with in-depth case studies covering a sample of five countries that represent different welfare state types (Nordic, Continental, Mediterranean, Liberal and Central/East European) so that we can show the complex mechanisms of multi-layered protection at work and how the policies in place have evolved over time in response to crisis episodes, disentangling the role of automatic stabilisers and discretionary elements. Our observation period ranges from the mid-2000s to the early 2020s and allows us to cover both the Great Recession of 2008/09 and its aftermath as well as the Covid-19 pandemic. We find consistent differences in terms of crisis resilience across countries and welfare state types. In general, Nordic and Continental European welfare states with strong upstream systems and minimum income support show better outcomes in core socio-economic outcomes such as poverty and exclusion risks. However, labour market integration shows some dualisms in Continental Europe. The study shows that minimum income support holds particular importance if there are gaps in upstream systems or cases of severe and lasting crises.
Selected Work in Progress
Co-authors: Cevat Giray Aksoy, Jose Maria Barrero, Nicholas Bloom, Katelyn Cranney, Steven J. Davis and Pablo Zarate.
Co-authors: Clemens Fuest, David Gstrein, Carla Krolage and Florian Neumeier.
Co-authors: Tabea Bucher-Koenen, Holger Stichnoth and Silke Übelmesser.
Co-authors: Sebastian Blesse, Sarah Necker, Andreas Peichl and Lisa Windsteiger.
Co-authors: Kerstin Bruckmeier, Sarah Necker, Andreas Peichl and Lisa Windsteiger.