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The Design of Social Policy in a Heterogeneous World

Objective

Modern societies are characterized by tremendous heterogeneity in economic outcomes: from heterogeneity in wages and employment, to heterogeneity in capital income, wealth and health outcomes. It is unclear, however, how to map heterogeneity in these outcomes to heterogeneity in welfare. This mapping is crucial for the design of tax and benefit systems, providing insurance against individual risk and redistributing income between individuals, while maintaining proper incentives.

The main objectives of HETEROPOLIS are: 1) to provide new insights on the relation between inequality in earnings, wealth and consumption, 2) to develop a new consumption-based method to measure welfare inequality and heterogeneity in the marginal value of social transfers, 3) to provide and implement a simple, but general evidence-based framework to evaluate the differential design of social insurance based on observable heterogeneity, 4) to analyse selection effects due to unobservable heterogeneity and how they affect social insurance design, 5) to analyse heterogeneity in behavioural “biases” and their consequences for policy design.

The first part of HETEROPOLIS analyses the use of registry-based consumption measures to evaluate heterogeneity in welfare and exploits a newly developed data set based on administrative registers for the universe of Swedish households providing comprehensive and detailed information on income, wealth, labour market outcomes and other variables. The second part develops and implements a general evidence-based framework to evaluate the design of multi-faceted social insurance programs in a heterogeneous world. The final part of HETEROPOLIS analyses and estimates different sources of heterogeneity that affect market efficiency and justify further government interventions.

Fields of science (EuroSciVoc)

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Programme(s)

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Topic(s)

Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.

Funding Scheme

Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.

ERC-STG - Starting Grant

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Call for proposal

Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.

(opens in new window) ERC-2016-STG

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Host institution

LONDON SCHOOL OF ECONOMICS AND POLITICAL SCIENCE
Net EU contribution

Net EU financial contribution. The sum of money that the participant receives, deducted by the EU contribution to its linked third party. It considers the distribution of the EU financial contribution between direct beneficiaries of the project and other types of participants, like third-party participants.

€ 1 497 505,00
Address
Houghton Street 1
WC2A 2AE London
United Kingdom

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Region
London Inner London — West Westminster
Activity type
Higher or Secondary Education Establishments
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Total cost

The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.

€ 1 497 505,00

Beneficiaries (1)

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