Three Essays in Public Economics

This thesis contains three chapters based on my studies in the field of demographic, public, and to a smaller extent, labor economics. The chapters are connected by the common theme of studying the interaction between government interventions and household behavior, touching on three major aspects of life: fertility, charity, and housing. My job market paper, titled ”Tax Incentives and Completed Fertility”, constitutes the first chapter of the thesis. It studies the effect of tax incentives on the number of children by the end of the female fertility cycle by identifying the impact of a large-scale family tax break reform in Hungary. I use linked Census data to estimate the average treatment effect on the treated, explore the heterogeneity of the effect, and build a small structural model to examine counterfactual policy scenarios. I find a positive impact of the policy on completed fertility in a relatively large magnitude compared to the previous literature. The second chapter is the result of a joint project with a Ph.D. colleague, Francesca Leombroni, titled ”Charitable Behavior and Public Intervention: a Survey Experiment”. We examine how the availability of donations affects the overall welfare of the poor in a society with equilibrium tax rates using a survey experiment in the U.S., in which participants elicited their preferences over taxes, their donation expectations, and their choices conditional on tax rates. We find that in the U.S. the availability of donations plays a pivotal role in providing financial resources to the poor. Finally, the third chapter, titled ”Housing and Fertility”, studies the interaction between housing choices and fertility in the context of a housing subsidy conditional on the number of children introduced in Hungary. I build and estimate a life-cycle model of households, and I simulate temporal pseudo-equilibria on the housing market to examine how different policy instruments would affect fertility, location, and house size choices of families. I find that while housing policies with children-related requirements positively impact fertility for poorer households, their housing conditions would worsen in the long run.