Essays in Public Economics

My thesis combines experimental and quasi-experimental evidence with structural models to study the causal effects and welfare consequences of institutional changes and public policies. The thesis focuses on incentives for policymakers, policies for the disadvantaged, and housing taxation. In the first chapter, I analyze whether a tenure requirement for a parliamentary pension in Italy changed policymakers’ behavior in confidence votes. Using a difference-in-discontinuities design and newly-collected data, I find that the pension incentive increased political stability but also party control over members of Parliament, ultimately reducing voters’ welfare. In the second chapter, I study the educational outcomes of a randomized policy in Chile that granted college admission to the top 15% students in disadvantaged high schools. The policy decreased students’ pre-college effort, likely due to belief biases about grade ranking. The initial positive effect on college enrollment gradually decreases in the five years after high school. A dynamic model shows that eliminating the belief biases would improve the academic preparation of college entrants. Expanding admission to disadvantaged students can improve their college attainment, but preparation matters and responds to pre-college incentives. In the third chapter, I study whether a basic pension increased the life expectancy of the elderly poor in Chile. Using administrative and survey data in a regression discontinuity design, I find that the pension was a cost-effective measure to reduce recipients’ mortality thanks to an increase in food consumption and visits to health centers. In the fourth chapter, I study the equilibrium effects of taxing property investors. Using a difference-in-differences estimator I find that a transfer-tax on UK investors reduced prices, but also transaction volumes and real-estate liquidity. After documenting strong search frictions in the market, I build a housing-search model and show that taxing investors increased welfare by offsetting the crowding-out externality they impose on owner-occupiers