Description: Department of Economics

Description: Johannes Spinnewijn

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| Working Papers|

| In Progress|

| Published Papers |

| Other Publications |

| Teaching|

| Miscellaneous|

| LSE Economics |

| Public Econ at LSE |

Johannes Spinnewijn

Position: Associate Professor of Economics (with tenure)

Research Interests: Public Economics, Social Insurance, Taxation, Behavioral Economics

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Other Positions, Affiliations and Awards:

Job Opportunity: Pre-doctoral Full-time Research Assistants

  • The Public Finance Group of the Economics Dept at the LSE is hiring full-time pre-doctoral research assistants. Applicants should be completing (or have completed) a Bachelor's or Masters degree and have strong quantitative and programming skills. This position is suitable for people looking to obtain experience in economic research for 1 to 2 years before applying to graduate school in economics. If you would like more information, please visit our website here.


  • The Value of Unemployment Insurance (with Camille Landais)

  • Abstract: In the absence of unemployment insurance (UI) choices, the standard approach to estimating the value of UI is to infer it from the observed consumption response to job loss in combination with some assumption on preferences. Exploiting the unique data and policy context in Sweden, we propose two alternative approaches, which we implement and compare to the standard consumption-based approach on the exact same sample of workers. We find that the drop in consumption expenditures upon job loss is relatively small (~ 13 percent), but the marginal propensity to consume (MPC), estimated using variation in local government transfers, is around 25 percent higher when unemployed than when employed. We show that this wedge in MPCs, the focus of our first approach, reveals a high relative price of smoothing consumption, confirmed by direct evidence on the limited consumption smoothing means available during unemployment. The estimated relative price provides a lower-bound on the value of UI, which turns out to be substantially higher than the consumption-based estimate under standard preference assumptions. Exploiting the UI choices embedded in the Swedish UI system, we also propose a Revealed-Preference approach, which confirms that the average value of UI is large in our setting, but also reveals substantial dispersion in the value of UI, above and beyond the variation in consumption drops.

  • Job Seekers' Perceptions and Employment Prospects: Heterogeneity, Duration Dependence and Bias (with Andreas Mueller and Giorgio Topa) - Slides; NBER Digest

  • Abstract: This paper analyses job seekers' perceptions and their relationship to unemployment outcomes to study heterogeneity and duration-dependence in both perceived and actual job finding. Using longitudinal data from two comprehensive surveys, we document (1) that reported beliefs have strong predictive power of actual job finding, (2) that job seekers are over-optimistic in their beliefs, particularly the long-term unemployed, and (3) that job seekers do not revise their beliefs downward when remaining unemployed. We then develop a reduced-form statistical framework where we exploit the joint observation of beliefs and ex-post realizations, to disentangle heterogeneity and duration-dependence in true job finding rates while allowing for elicitation errors and systematic biases in beliefs. We find a substantial amount of heterogeneity in true job finding rates, accounting for almost all of the observed decline in job finding rates over the spell of unemployment. Moreover, job seekers' beliefs are systematically biased and under-respond to these differences in job finding rates. Finally, we show theoretically and quantify in a calibrated model of job search how biased beliefs contribute to the slow exit out of unemployment. The biases can explain more than 10 percent of the incidence of long-term unemployment.

  • How to Improve Tax Compliance? Evidence from Population-wide Experiments in Belgium (with Jan-Emmanuel De Neve, Clement Imbert, Teodora Tsankova and Maarten Luts)

  • Abstract: We study the impact of deterrence, tax morale, and simplifying information on tax compliance. We ran five experiments spanning the tax process which varied the communication of the tax administration with all income taxpayers in Belgium. A consistent picture emerges across experiments: (i) simplifying communication increases compliance, (ii) deterrence messages have an additional positive effect, (iii) invoking tax morale is not effective. Even tax morale messages that improve knowledge and appreciation of public services do not raise compliance. In fact, heterogeneity analysis with causal forests shows that tax morale treatments backfire for most taxpayers. In contrast, simplification has large positive effects on compliance, which diminish over time due to follow-up enforcement. A discontinuity in enforcement intensity, combined with the experimental variation, allows us to compare our letter treatments against standard enforcement measures. The simplification treatments are far more cost-effective, allowing for substantial savings on enforcement costs, and also improve compliance in the next tax cycle.

  • The Trade-off between Insurance and Incentives in Differentiated Unemployment Policies
  • Forthcoming in special issue of Fiscal Studies celebrating 50yrs of IFS

    Abstract: The article revisits the central trade-off between insurance and incentives in the design of UI policies. The generosity of UI benefits does not just differ across countries, but also across workers within countries. After illustrating some important dimensions of heterogeneity in a cross-country analysis, I extend the standard Baily-Chetty formula to identify the key empirical moments and elasticities required to evaluate the differentiated unemployment policy within a country. The article reviews some prior work and aims to provide guidance for future work trying to inform the design of unemployment policies.

Other Working Papers

Work in Progress

  • Designing Retirement Benefits: Theory and Evidence from Sweden (with J. Kolsrud, C. Landais and D. Reck)

  • The Consumption Effects of Unemployment Benefits (with C. Landais)

  • Deductible Choice in the Netherlands (with B. Handel, J. Kolstad and T. Minten)

  • A Pigouvian Approach to Social Insurance Design (with N. Hendren and C. Landais) - in preparation for Annual Review of Economics

Published Papers

Other Publications

Current Courses Taught

  • Public Economics (PhD, LSE course, ec534)
  • Public Economics (MSc, LSE course, ec426)
  • Public Economics (MPA, LSE course, ec410)

Press Coverage/Other Writings

  • "Consumption Data: New Frontiers" VoxEU (April 4, 2018) (link)
  • "Unemployment Insurance and Adverse Selection" VoxEU (February 3, 2018) (link)
  • "Designing Tax Policy in High-Evasion Economies" VoxEU (January 5, 2016) (link), Microeconomic Insights (April 27, 2016) (link)
  • "De mythe van de hangmat" Op-ed in De Standaard (May 15, 2014) (link)
  • "De ivoren toren van economen is een mythe" Op-ed in De Standaard (August 3, 2013) (link)
  • "En als we langdurig werklozen meer zouden betalen?" Op-ed in De Morgen (February 12, 2012) (link)
  • "The Role of Commitment" comment on "On the interaction between subsidiarity and interpersonal solidarity" by Jacques Dreze (link)
  • "Hard cash or a secure job - which is better?" featured in Financial Times (February 7, 2009) (link)

© 2018 London School of Economics. All rights reserved. Picture by Jef Boes.