Three Essays in Public Economics

In the first chapter of this thesis, based on joint work with my colleague Bence Szabo, I measure the extent of charitable behavior crowding out public intervention and how this phenomenon affects the welfare of the poor. To achieve this objective, we collect novel survey data on a representative sample of the U.S. adult population. In the survey, respondents are asked to go through several hypothetical scenarios, constructed on the basis of a simple model of public good contribution to learn about their preferences and expectations regarding donations and taxation. We find that when donations are available, government expenditure on the poor is lower in equilibrium. Yet, households in need are better off due to disproportionately higher donations. Therefore, in our setting, private charity crowds out public intervention only to a limited extent, affecting equilibrium-level taxes only slightly. We also estimate the structural parameters of preferences in our sample and find that individuals assign a sizable weight to both the utility of the poor and to the act of donating itself. The large contribution of the latter component rationalizes why taxation alone cannot fully compensate for the absence of donations. In the second chapter of this thesis, I investigate whether, and due to which channels, university students from different socioeconomic backgrounds differ in their propensity to choose an internship as their access point to the labor market. After presenting evidence that individuals from wealthier backgrounds are more likely to start an extra-curricular internship, I collect novel survey data on a sample of university students to estimate a model of contract choice. In the survey, I elicit both career choices in hypothetical but realistic scenarios and expected labor market returns of different initial contract types. I find that individuals from different socioeconomic backgrounds have a comparable structure of beliefs but differ in their preference parameters, and in the weight they assign to job stability as opposed to wage. In the third and final chapter of this thesis, I investigate the relationship between emigration and public good provision in the migrants’ communities of origin. I combine Mexican migration data from the Matricula Consular de Alta Seguridad (MCAS) dataset and data on public good provision from the Mexican Census, and instrument the number of migrants with a variant of the shift-share instrument to circumvent the endogeneity of migration decisions. I find that emigration has a positive impact on publicly provided access to basic services, and that this effect is mainly driven by rural municipalities. Overall, these findings support the idea that the impact of emigration on migrants’ communities of origin also proceeds through social and political channels.