Research

Does immigration change support for redistribution? We design and conduct large-scale surveys and experiments in six countries to investigate how people perceive immigrants and how these perceptions influence their support for redistribution. We find striking misperceptions about the number and characteristics of immigrants. In all countries, respondents greatly overestimate the total number of immigrants, think immigrants are culturally and religiously more distant from them, and economically weaker–less educated, more unemployed, and more reliant on and favored by government transfers–than they actually are. In the experimental part of our paper, we show that simply making respondents think about immigration before asking questions about redistribution makes them support less redistribution, including actual donations to charities. The perception that immigrants are economically weaker and more likely to take advantage of the welfare system is strongly correlated with lower support for redistribution, much more so than the perceived cultural distance or the perceived share of immigrants. These findings are confirmed by further experimental evidence. Information about the true shares and origins of immigrants does not change support for redistribution. An anecdote about a “hard working” immigrant has somewhat stronger effects, but is unable to counteract the negative priming effect of making people think about immigration. Our results further suggest that narratives shape people’s views on immigration more deeply than hard facts.

Americans are polarized not only in their views on policy issues and attitudes toward government and society but also in their perceptions of the same factual reality. We conceptualize how to think about the “polarization of reality” and review recent papers that show that Republicans and Democrats view the same reality through a different lens. Perhaps as a result, they hold different views about policies and what should be done to address economic and social issues. We also show that providing information leads to different reassessments of reality and different responses along the policy support margin, depending on one's political leaning.

Using data from 16 OECD countries from 1981 to 2014 we study the effects on output of fiscal adjustments as a function of the composition of the adjustment—that is, whether the adjustment is mostly based on spending cuts or on tax hikes—and of the state of the business cycle when the adjustment is implemented. We find that both the “how” and the “when” matter, but the heterogeneity related to the composition is more robust across different specifications. Adjustments based upon permanent spending cuts are consistently much less costly than those based upon permanent tax increases. Our results are generally not explained by different reactions of monetary policy. However, when the domestic central bank can set interest rates—that is outside of a currency union—it appears to be able to dampen the recessionary effects of consolidations implemented during a recession.

I study how beliefs about search costs, returns to search effort, and outside options relate to the job mobility decisions of employed workers. I design an online survey and administer it to a representative sample of wage and salaried workers in the US. In the survey, I directly measure employed workers' perceptions of search costs---time, money, stress---and the perceived returns to their job search effort---the expected success rate of their job applications. I also elicit workers' beliefs about their opportunities outside of their current job and measure their knowledge of the wage distribution in their occupation. I document significant heterogeneity in expectations across demographic groups. Women expect higher costs and lower returns to effort. I find that beliefs about outside options and returns to effort are strong predictors of job search intentions. In addition, respondents who expect to spend more time looking for job openings have a lower propensity to search, consistent with the relevance of information frictions. Using two information experiments, I show that accurate information about the median wage does not shift search intentions, while positive information on the recent search experience of similar workers is more effective for groups that are more worried about search costs.