- Which research project are you currently working on the most?
I am mostly working on a research project called TAXBUNCH, which received support from the Research Council's program for young research talents. The project aims to uncover how the tax and benefits system shapes people's labor supply, to what extent taxation reduces labor supply, and why. This is a four-year research project that is in its very early stages.
- What do you hope to find out?
The project begins with the existing literature: Over many years, economists have found that workers are relatively unresponsive to small incentives in the tax system, such as changes in marginal tax rates or shifts in the thresholds of income tax brackets. From a policy perspective, this can be seen as a good thing because it means that the efficiency loss from distortionary taxes on labor might be relatively small.
However, we know relatively little about why these responses are small. There are many possible explanations: Maybe they are small because they are derived from minor adjustments in the tax and benefits system or measured in the short run, which may imply that the results cannot be extrapolated to larger reforms. Perhaps they are small because the methods used to measure them have weaknesses? Maybe informational frictions or rigidity in labor markets make it difficult for individuals to adjust their labor supply to the incentives in the tax system? Or perhaps people misunderstand the difference between advance tax withholding and the actual tax system?
- Why is this important?
Because it is crucial to understand how to interpret the low responses found in the literature and to design better tax and benefit policies that account for distortions.
- Who are you collaborating with?
I have hired a postdoctoral fellow for the project, and in addition, I have partners at the University of Wisconsin-Madison, UC Santa Barbara, and BI in Oslo, so it's an international team.
What do you look for when choosing collaborators?
I look for people with interesting ideas and overlapping interests, and I particularly enjoy working with people who are good at writing and placing contributions within the literature.
What other research projects are you involved in?
I am working on a project that seeks to measure workers' expectations about salaries in different jobs, their preferences for salary and other job attributes, and how this change when employers are required to disclose salaries in job advertisements. This is a policy that has been proposed in several countries and tested in some to help reduce information frictions in the labor market, so it is therefore interesting to investigate. To address this, we conducted a survey experiment among students at the Faculty of Social Sciences!
In addition, I enjoy working on methodology. In an ongoing project with researchers from Boston and Fribourg, I am trying to develop a method to statistically test whether the assumptions necessary for using instrumental variable methods are satisfied.
What do you find most interesting about being a researcher?
It is a great privilege to largely control your own time and decide which questions to pursue. I also enjoy teaching, and if I have succeeded in ensuring that one fewer student goes out into the world and blindly believes the next correlation study showing that carrots cause cancer, then I've had a good day.
What is the most common question you get about your job when you are with others?
Most people ask me about macroeconomics: interest rates, inflation, how the economy will fare in the future, or whether they should invest in stocks. Unfortunately, I have very little to contribute there, but if they need someone who can explain why correlation does not imply causation, I am the man for the job.