Maximilian Blesch

 Ongoing Research

Differentiated Product Demand Estimation with a Secondary Market

with Kenneth Gillingham, Jonas Slaathaug Hansen, Fedor Iskhakov, Nikolaj Moll Lund, Anders Munk‑Nielsen, John Rust, Bertel Schjerning

 Working papers

Life-Cycle Responses to Pension Reform: The Role of Subjective Policy Beliefs
with Bruno Veltri

Abstract: This study quantifies the impact of Statutory Retirement Age (SRA) reforms on individual behavior and welfare in the presence of subjective beliefs about the policy environment. We elicit policy beliefs from novel survey data and estimate a rich structural life-cycle model of labor supply, retirement, and savings decisions. In the model, agents have probabilistic expectations about the future evolution of the SRA (policy uncertainty) and strongly overestimate the penalty for early retirement (misinformation). Our results show that while these beliefs distort behavior and reduce individual welfare, they can support policy objectives. While increases in the SRA delay retirement and boost old-age labor supply, we estimate negative reform effects on labor supply and savings of younger agents. Policy uncertainty attenuates these negative effects by 20-50 percent while maintaining effectiveness at the retirement margin. Eliminating misinformation would cause individuals to retire around 1.1 years earlier and reduce lifetime labor supply by 3.2 percent.


Robust decision-making under risk and ambiguity
with Philipp Eisenhauer

Abstract: Economists often estimate economic models on data and use the point estimates as a stand-in for the truth when studying the model’s implications for optimal decision-making. This practice ignores model ambiguity, exposes the decision problem to misspecification, and ultimately leads to post-decision disappointment. Using statistical decision theory, we develop a framework to explore, evaluate, and optimize robust decision rules that explicitly account for estimation uncertainty. We show how to operationalize our analysis by studying robust decisions in a stochastic dynamic investment model in which a decision-maker directly accounts for uncertainty in the model’s transition dynamics.

Biased Wage Expectations and Female Labor Supply
with Philipp Eisenhauer, Peter Haan, Boryana Ilieva, Annekatrin Schrenker, Georg Weizsäcker - R&R at Journal of Political Economy Microeconomics

Abstract: We quantify the effects of biased wage expectations on female labor market outcomes. A wide sample of full-time and part-time employees report counterfactual predictions about their own wage trajectories in future full-time and part-time employment, revealing severe misperceptions. Actual wage growth occurs almost exclusively in full-time work, whereas it is close to zero in part-time work, as we show with reduced-form regressions and in a structural life-cycle model. Subjective expectations, however, predict a mild difference in the opposite direction, with strong over-optimism about the returns to part-time experience. We leverage the structural model to quantify how employee beliefs influence their labor supply, earnings and welfare over the life cycle. The bias increases part-time employment strongly, induces flatter long-run wage profiles, and substantially influences the employment effects of a widely discussed policy reform, the introduction of joint taxation. The most significant impact of the bias appears for college-educated women, consistent with the large difference between expected and realized wages observed for this group.