OFS will fundamentally affect our research in public economics by expanding capacity, by reallocating resources, and by bringing together different research groups and research traditions. The centre will strengthen the empirical focus of the research env ironment. It will renew the teaching of public economics by offering new courses and stimulating writing of master theses within the field. It will offer better opportunities for doctoral studies in public economics. Our initial research agenda embrac es five main topics: Taxes, labour supply and endogenous wages, Capital taxes, Income reporting and tax evasion, Public services and taxes, and Taxes and cross-border mobility.
OFS will integrate empirical and theoretical analysis of labour supply, wage responses to the tax structure and optimal tax considerations where efficiency and distribution matter. Survey data will be used extensively in pursuing this objective. Projects on capital taxation will consider effects of taxes with imperfect loss offs et for smaller firms and corporations. Research on income reporting and tax evasion will explore people's opportunities for evasion, how the social environment affects reporting, and what are the distributional effects of evasion. The public provision of many services has a number of public finance implications that will be subject to research. Research on taxes and cross-border mobility will investigate the empirical associations between taxation and outmigration.
Several of the empirical studies (of wage responses, mobility, etc.) face fundamental challenges when it comes to identification. A further challenge is the concealment of data by the very nature of tax evasion. Policy reforms, exogenous shocks, random-assignment-like variations, and comb ination of data sources are key ingredients in strategies to overcome the problems. The use of large register data sources will be crucial.
The OFS findings will provide new insights of relevance for econom