12:00-13:00

The Composition Effects of Tax-Based Consolidations on Income Inequality

Gabriele Ciminelli (University of Amsterdam)

We analyze the effects of tax-based consolidations on income inequality, output and labor market conditions for a sample of 16 OECD countries over the period 1978-2012. We find that tax-based consolidations reduce income inequality, but at the cost of weaker economic activity. Moreover, contrary to previous findings, we show that indirect taxes reduce income inequality by more than direct taxes, possibly due to the operation of a positive labor supply channel. Finally, we show that the effects of tax-based consolidations in reducing income inequality are concentrated in those countries with a higher preference for redistribution. Joint with Ekkehard Ernst, Massimo Giuliodori and Rossana Merola

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13:00-14:00

We Don’t Need No Education: Reconstruction and Conflict across Afghanistan

Travers Child (VU University Amsterdam)

Field interviews conducted by the author in Afghanistan suggest current theories linking conflict to development do not adequately account for ideological drivers of resistance. We present a model demonstrating how reconstruction activities of an occupier can exacerbate violence through popular discontent if projects are ideologically controversial. We test the model using unique data on military reconstruction and public opinion recently obtained from NATO Communications and Information Agency. Public opinion polls indeed suggest education projects generate antipathy towards international forces.