Economic theory and empirics are essential for designing good tax and transfer policies. While theory provides qualitative explanations and predictions of how public policy affect individual incentives, behavior and welfare, it cannot inform us on the magnitude of relationships, nor the plausibility and practical relevance of the assumptions they build on. To answer these questions we need to combine theory with data. Access to more and better data on economic behavior, and a better understanding of how one can identify the causal effects of public programs have increasingly transformed public economics (and economics more generally) into an empirical discipline.

The bulk of our research is empirical. We will conduct theoretically founded – both neoclassical and behavioral –research with the ultimate aim to inform, guide and improve public policy in Norway.

Research at OFS can be sorted into two parts:

1. How taxes and transfers affect individual and firm behavior

2.Tax morale and the legitimacy of a generous welfare state