This research project plans to build novel mechanisms into public finance. This will be achieved by utilizing creative methods to combine comprehensive administrative data with unique survey data, and by utilizing new sources of exogenous variation. In particular the project will consist of two themes:
1. Causal evidence on novel elements in firms behavior. These will be divided into projects on firms' heterogenous responses to changes in consumption taxes by utilizing VAT reforms, and profitability of firms and the income distribution of workers by utilizing reforms in the 1990s.
2. Causal evidence on novel behavioral margins. These will be divided into the extent and determinants of tax evasion and the effect of home care on children and longer term labor market outcomes of mothers. These utilize unique variation in child home-care subsidies and comprehensive administrative data.