In this proposal we aim to study how humans interacting in social and economic networks learn from their own experience and that of their social contacts. We are planning to conduct a number of studies all centring on the question of how (possibly non Bayesian) decision makers learn in networks and how they update their beliefs about the probability of different events if they receive new information from a neighbour in the network. This question has widespread applications for example to explain phenomena like herding, persuasion bias, the importance of airtime or the emergence of political polarization. In the first part of the project we use theoretical models, laboratory experiments, and field data to understand how people update their beliefs if they receive new information from a neighbour in the network. Standard theory would say that agents should rely on Bayesian updating in these situations. This may prove to be arbitrarily complex in a social network. We plan to run several laboratory experiments to study how information updating takes place in networks. Insights gained from our theory can help in the design of some of the experiments. Using a large data-set of 7 million Austrian households will allow us to test some of the predictions derived with our theory in the field. Finally we want to apply the insights gained to develop a flexible model of information updating in networks that works also if agents have only partial information about the network. In the second part of the project we will study how agents learn in social networks more generally. Since information processing is a key ingredient of any learning process, this second part will build on the first part of the study. We will rely mostly on laboratory experiments and possibly some theoretical modelling here.

This research project examines how recent challenges, such as increased economic uncertainty and ethnic diversity, have affected inequality and support for the welfare state in European countries. It also investigates the work incentives embedded in the existing tax- and benefit systems and how these affect individuals? behaviour, both in the short and in the long run. This information is a crucial input to governments? decisions on how to finance the welfare system and redistribute income while maintaining incentives to work and avoiding poverty traps. The project is divided into three strands. We first measure inequality developments using multidimensional and lifetime perspectives, and assess how different EU tax and benefit systems reduce economic vulnerability. Second, we investigate support for redistribution, asking how ethnic diversity affects people?s support for the welfare state and, using methods from experimental psychology, examining the determinants of redistributive attitudes for different groups. Third, we examine how welfare states can best be financed, including an analysis of policies targeted to boost labour supply among the low-skilled and elderly, and of how complexity of tax design affects its redistributive effects. We also produce new evidence on the long-run distortionary effects of taxes. The research will produce academically meritorious publications and highly policy relevant guidance on reforms to the redistributive side of the welfare state. The research will use comparative micro data across European countries and detailed register data from individual countries. The project unites economists, political scientists, sociologists and psychologists with extensive experience advising governments and the EC on policy design.

This innovative project adopts a holistic approach to understanding the dynamics of inequality across the life-course. We analyze how education, labor market and family choices interact to structure accumulated advantage and disadvantage over the life course. Using panel data from five EU countries for over 20 years and cutting-edge statistical methods, including multichannel sequence analysis, we take a comparative approach to exploring how cross-country economic and institutional differences affect inequality outcomes and life courses. Early adulthood is a crucial period of transition where people face multiple choices - about education, jobs, partnerships and childbearing – determining future life. We focus on key turning points, examine their interrelation and explore the cumulative impact on individual and group inequalities. Focusing on transitions during early adulthood, into education, jobs and family formation, we address the following project call themes: “Labor market and family trajectories and the growth of inequality,” “Early adult transitions into tertiary education, vocational training and economic activity” and “Early life influence and outcomes.” The research team of the PI, four CIs, postdoctoral fellows and PGR students will meet regularly and provides appropriate leadership, skills, and capacity building. Academic impact will be achieved by going beyond the state-of-the-art, the research producing new empirical findings and contributing to theory building. Potential for policy impact is high. We will establish early contact with key national and EU stakeholders and engage through meetings, the media, research briefings and social media.

This research project examines how recent challenges, such as increased economic uncertainty and ethnic diversity, have affected inequality and support for the welfare state in European countries. It also investigates the work incentives embedded in the existing tax- and benefit systems and how these affect individuals? behaviour, both in the short and in the long run. This information is a crucial input to governments? decisions on how to finance the welfare system and redistribute income while maintaining incentives to work and avoiding poverty traps. The project is divided into three strands. We first measure inequality developments using multidimensional and lifetime perspectives, and assess how different EU tax and benefit systems reduce economic vulnerability. Second, we investigate support for redistribution, asking how ethnic diversity affects people?s support for the welfare state and, using methods from experimental psychology, examining the determinants of redistributive attitudes for different groups. Third, we investigate the work incentives embedded in the existing tax and benefit systems and how these affect individuals? behaviour, both in the short and in the long run, taking into account issues like the complexity of the tax design. The research will produce academically meritorious publications and highly policy relevant guidance on reforms to the redistributive side of the welfare state. The research will use comparative micro data across European countries and detailed register data from individual countries. The project unites economists, political scientists, sociologists and psychologists with extensive experience advising governments and the EC on policy design.