Ugo Troiano

Law, Economics, and Culture: Theory of Mandated Benefits and Evidence from Maternity Leave Policies

Why do some countries mandate a long maternity leave, while others mandate only a short one? We incorporate into a standard mandated-benefit model social tolerance of gender-based discrimination, showing that the optimal length of maternity leave depends on it. The less tolerant a society is of gender-based discrimination, the longer the maternity leave it will mandate. Relying on recent research in psychology and linguistics according to which patterns in languages offer a window into their speakers’ dispositions, we collected new data on the number of gender-differentiated personal pronouns across languages to capture societies’ attitudes toward gender-based discrimination. We first confirm, using within-country language variation, that our linguistic measure is correlated with attitudes toward gender-based discrimination. Then, using cross-country data on length of maternity leave, while controlling for other parameters, we find a strong correlation between our language-based measure of attitudes and the length of maternity leave.

Shaming Tax Delinquents

Many federal and local governments rely on shaming penalties to achieve policy goals, but little is known about how shaming works. Such penalties may be ineffective, or even backfire by crowding out intrinsic motivation. In this paper, we study shaming in the context of the collection of tax delinquencies. We sent letters to 34,334 tax delinquents who owed a total of half a billion dollars in three U.S. states. We randomized some of the information contained in the letter to vary the salience of financial penalties, shaming penalties, and peer comparisons. We then measured the effects of this information on subsequent payment rates. We found that increasing the visibility of delinquency status increased compliance by individuals who have debts below

Old and Young Politicians

2500, but had no significant effect on individuals with larger debt amounts. Financial reminders had a positive effect on payment rates independent of the size of the debt, while information about the delinquency of neighbors had no effect on payment rates.We present theory and evidence about the enforcement of tax delinquencies, which are tax debts incurred with the government. In our model, the tax agency relies on a financial penalty and a social penalty that involves publishing the names of tax delinquents online, a policy that is becoming increasingly common. We show that, when the tax agency cares about social welfare as well as revenues, the optimal policy involves a mix of financial and social penalties. We conducted a field experiment with 35,000 tax delinquents who owed half a billion dollars in three U.S. states. We find that increasing the salience of both financial and social penalties reduces tax delinquencies. We also provide suggestive evidence that, as predicted by our model, the effectiveness of social and financial penalties depends on the debtors income garnishability.

Broadening the State: Policy Responses to the Introduction of the Income Tax

We consider the role of a politicians age in Italian municipal governments. When the term limit is not binding, younger mayors engage in political budget cycles more often than older mayors. Thus younger politicians behave more strategically in response to electoral incentives, probably because they expect to have a longer political career and stronger career concerns. We discuss and rule out several alternative interpretations.

Social Capital and Political Accountability

We present new evidence about a mechanism -- the broadening of the tax base -- through which governments increase state capacity. Our difference-in-differences identification strategy exploits the staggered introduction of the income tax across twentieth-century US states. We find that tax broadening is associated with 1) a significant increase in total revenues and 2) a significant increase in total government expenditures, and in particular spending on public goods in education and health. We show suggestive evidence that political ideology affects policy responses to the broadening of the tax base.