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Field-experimental studies have shown that people litter more in more littered environments. Inspired by these findings, many cities around the world have adopted policies to quickly remove litter. While such policies may prevent people from following the bad example of litterers, they may also invite free-riding on public cleaning services. We are the first to show that both forces are at play. We conduct a natural field experiment where, in a randomly assigned part of a residential area, the frequency of cleaning was drastically reduced during a three-month period. We find evidence that some people start to clean up after themselves when public cleaning services are diminished. However, the tendency to litter more dominates. We also find that these responses continue to exist for some time after the treatment has ended.

We examine differences in altruism and laziness between public sector employees and private sector employees. Our theoretical model predicts that the likelihood of public sector employment increases with a worker's altruism, and increases or decreases with a worker's laziness depending on his altruism. Using data from the German Socio-Economic Panel Study, we find that public sector employees are significantly more altruistic and lazy than observationally equivalent private sector employees. A series of robustness checks show that these patterns are stronger among higher educated workers; that the sorting of altruistic people to the public sector takes place only within the caring industries; and that the difference in altruism is already present at the start of people's career, while the difference in laziness is only present for employees with sufficiently long work experience.

We explain why means-tested college tuition and means-tested government grants to college students can be efficient. The critical idea is that attending college is both an investment good and a consumption good. If education has a consumption benefit and tuition is uniform, the marginal rich student is less smart than some poor people who choose not to attend college, thus reducing the social returns to education and increasing the college's cost of education. We find that competition among profit-maximizing colleges results in means-tested tuition. In addition, to maximize the social returns to education government should means-test grants. We thus provide a rationale for means-tested tuition and grants which relies neither on capital market imperfections nor on redistributive objectives.

This paper examines unemployment, wages, and voters' demand for redistribution policy under three different labour market structures: laissez–faire, wage–setting by company or industrial unions, and wage–setting by a central union. Decisions on the level of taxes and benefits are made by majority rule. Taxes, wages, and unemployment are lowest under competitive wage–setting and highest with decentralised unions. A higher degree of centralisation of union wage–setting implies lower unemployment and taxes because a fiscal externality is internalised. Under some conditions about the composition of the population, the political–economic equilibrium can further be improved upon by cooperation between the government and the central union. This seems to have happened in the Netherlands where the unions and the government agreed to cut taxes and restrain wages, which has led to the 'Dutch Miracle'.

Der Beitrag untersucht die Interaktion zwischen Gewerkschaften, die Löhne aushandeln, und Politikern, die die Höhe der Arbeitslosenversicherungsbeiträge und des Arbeitslosengeldes bestimmen. Wenn Politiker sich nicht für eine zukünftige Politik verpflichten, werden Beiträge und Leistungen im Verhältnis übermässig hoch. Das Ergebnis ist geringe Beschäftigung und niedrige Produktion. Die Wahl eines Politikers, der konservativer ist als der Durchschnittswähler mag zwar das Glaubwürdigkeitsproblem lösen, auf der anderen Seite könnte die Lohnflexibilisierung zu einer Abschwächung des Glaubwürdigkeitsproblems führen. Durch den Schleier der Ignoranz betrachtet, zeigt sich das Glaubwürdigkeitsproblem möglicherweise als ein Segen und nicht als Fluch. (ICCÜbers)

This paper offers an explanation for why policymakers stick to inefficient policy decisions. I argue that repealing a policy is a bad signal to voters about the policymaker's competence if voters do not have complete knowledge about the effects of implemented policies. I derive the optimal policymaker's decision on continuation of a policy, assuming that voters' beliefs about the policymaker's competence are updated according to Bayes' rule. I show that if the policymaker cares sufficiently about reelection, he will never repeal a policy. 1 Appendix, 19 References. Adapted from the source document.

This paper examines unemployment, wages, & voters' demand for redistribution policy under three different labor market structures: laissez-faire, wage-setting by company or industrial unions, & wage-setting by a central union. Decisions on the level of taxes & benefits are made by majority rule. Taxes, wages, & unemployment are lowest under competitive wage-setting & highest with decentralized unions. A higher degree of centralization of union wage-setting implies lower unemployment & taxes because a fiscal externality is internalized. Under some conditions about the composition of the population, the political-economic equilibrium can further be improved upon by cooperation between the government & the central union. This seems to have happened in the Netherlands where the unions & the government agreed to cut taxes & restrain wages, which has led to the "Dutch Miracle.". 1 Figure, 1 Appendix, 20 References. Adapted from the source document.