## people-economics-stantcheva

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### Research focus and approach
- Goal: "to get into people’s minds and try to understand how they reason, what their perceptions are, their attitudes, their knowledge on various economic policy issues."
- Methods: large-scale socio-economic surveys and experiments, often in several countries, conducted through the Social Economics Lab (founded 2018).
- Interdisciplinary alignment: brings economics closer to psychology, sociology, and political science by uncovering data invisible in traditional economic datasets.

### Major contributions and findings
- Taxation and human capital:
  - 2017 study "Optimal Taxation and Human Capital Policies over the Life Cycle" analyzed how tax and human capital policies interact over a person’s life span.
  - Finding: income-contingent loans can allow people to pay for higher education without long-term debt that exacerbates inequality, if the system collects more during good times and protects borrowers during bad times.
  - Observation: "nine or so countries, including Australia, New Zealand, and the UK, have adopted some form of income-contingent loans" but many fail to collect more during good times.
- Perceptions shape policy support:
  - Survey of 22,000 people in six countries (France, Germany, Italy, Sweden, the UK, and the US) found large gaps between reality and perceptions about immigrants:
    - Respondents greatly overestimated the number of immigrants.
    - Respondents perceived immigrants to be economically weaker, more unemployed, and less educated than they really were.
    - These misperceptions led respondents to say immigrants paid less in taxes and received a much larger share of government transfers than actually the case.
  - Misperceptions are largest among people with lower education, in lower-paid jobs, working in sectors that employ many immigrants, and among people on the right of the political spectrum.
  - Making people think about immigration before asking about redistribution reduces support for redistribution.
  - Two biggest predictors of reduced support for redistribution: the perception that immigrants "free-ride" and the perception that immigrants are economically weak.
- Narratives versus facts:
  - Facts about immigrants (numbers, origins) do not shift views on redistribution; narratives that counter the "free-rider" story (e.g., stories about hard-working immigrants) are effective.
- Fairness as a driver:
  - People prioritize who the winners and losers are; notions of fairness differ across the political spectrum and often matter more than efficiency arguments.
  - In climate policy surveys across 20 countries, views are shaped by perceptions of who will bear the burden of paying (e.g., that lower- or middle-income classes bear a disproportionate burden through environmental taxes while higher-income people bear less).
- Other ongoing research:
  - Studying how the general property tax in the US shaped economic development in the 19th century.
  - Studying the impact of France’s wealth tax on tax evasion and wealth.
  - Extending research on how people form views on key economic policies, including a project on attitudes concerning climate change across 20 countries.

### Policy implications and recommendations
- Design of student finance:
  - Consider income-contingent loan systems that adjust contributions both upward in good times and downward in bad times to maintain a funded common pool and avoid exacerbating inequality.
- Redistribution and immigration policy:
  - Policy communication should address perceptions about who benefits from redistribution and counter "free-rider" narratives that reduce support for redistribution.
  - Simple factual corrections about immigrant numbers are insufficient; use narratives and explanations of policy mechanisms to change views.
- Climate policy:
  - Policymakers should account for public perceptions of fairness in burden sharing when designing environmental taxes and other climate measures.
- Trade policy and local labor markets:
  - In response to perceptions that globalization and outsourcing harm jobs, consider mechanisms—after deliberative and participatory processes—to restrict imports produced under labor-rights-violating conditions that threaten domestic jobs or working conditions.

### Impact, recognition, and roles
- Academic recognition:
  - PhD from MIT in 2014; age 36 at time of profile.
  - Winner of the 2020 American Economic Association’s Elaine Bennett Research Prize.
  - First woman to join the editorial board of the Quarterly Journal of Economics.
- Leadership and mentorship:
  - Founder of the Social Economics Lab (2018) with about 20 research fellows.
  - Took a leading role after the sudden death of colleague Alberto Alesina (May 2020, age 63) and has worked to continue his legacy.
  - Prioritizes teaching and coaching graduate and undergraduate students.
- Policy engagement:
  - Member of the French Council of Economic Analysis.
  - Joined an international commission at the start of the COVID-19 pandemic to assess long-term challenges and propose measures addressing inequality (tasked with inequality alongside Dani Rodrik).
  - Published a note for the French Council of Economic Analysis on French attitudes about climate policies.
  - Findings discussed with great interest in France and Europe, especially in the context of the gilets jaunes crisis that started in 2018.

*From Finance & Development, September 2022.*

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_Source: https://www.imf.org/-/media/files/publications/fandd/article/2022/september/people-economics-stantcheva.pdf_