Cutting-edge research that delivers real-time impact on society

When the government released Danes’ frozen holiday pay in 2021, the Ministry of Finance had previously consulted with the researchers at CEBI.

“The ministry called and asked if it was a wise decision, said Claus Thustrup Kreiner. He explained how there was a decrease in consumption during the COVID-19 pandemic. and that the ministry wanted to know whether Danes would change their behavior and consume more if the frozen holiday pay was paid out.

CEBI was able to comment on this because the center had previously studied the impact on consumers when pension funds were disbursed during the 2009 financial crisis.

“The Ministry of Finance was very interested in knowing whether the lessons from that study could be transferred to this situation,” said Kreiner.

The Ministry of Finance’s inquiry is just one in a long list of examples of how the world beyond CEBI consistently draws on the center’s research and how the center delivers impactful results when decisions are to be made at Christiansborg.

Recently, Kreiner chaired a commission tasked with providing recommendations for future employment initiatives.

“We conducted extensive analyses using a large survey, which we linked to register data. As a result, our approach became highly analysis-driven, allowing us to add nuance to the debate with clear indications of significant challenges within the regulatory system established in the area.”

What determines whether you become rich or poor or end up in crime?

Kreiner has, among other roles, served as a member of the Tax Commission and as an advisor to the Economic Councils before becoming head of CEBI. Given his background, it’s no surprise that Christiansborg seeks his advice. However, the center’s basic research is also making its way on to current agendas and attracting significant attention. So, what exactly are they up to?

“The center’s purpose is to study behavior and inequality, such as wealth inequality,” said Kreiner. He went on to explain that understanding behavior and inequality is important because it can help develop policies that account for how people actually behave. The research also provides insights into how factors like patience and risk tolerance affect people’s financial decisions and their likelihood of engaging in crime.

“Measuring behavior and inequality is a significant challenge. Conducting experiments is difficult, and when done, they tend to be overly simplistic. However, in Denmark, we have access to unique data through our CPR numbers, which allow us to integrate and combine datasets.”

Quoted in Joe Biden’s Economic Report

“We are pursuing fundamental scientific questions in areas where our knowledge is limited. The reason we can provide answers in these areas is that we have the ability to combine unique data that no one else in the world can. This allows us to test fundamental economic theories, something we’ve done for the first time ever. As a result, we’ve been featured in some of the top journals.” In this regard, Kreiner mentioned one of CEBI’s studies, which shows that the majority of the pay gap between men and women is related to children and that women’s income decreases immediately after the birth of the first child. 

”You might think that the gap closes as time progresses. But our studies show that the gap never closes and that income for women remains about 20% lower up to 10 years after childbirth, while men’s income is unaffected.

“The research article has garnered significant attention, with its findings cited alongside other CEBI research on gender inequality in the 2022 U.S. President’s Economic Report. ” https://www.econ.ku.dk/cebi/news/cebi-research-informs-potus/?utm_source=chatgpt.com

In this context, Kreiner also points to another recent study. The results show how grandmothers, but not grandfathers, experience a significant drop in their income after their children have children: https://www.econ.ku.dk/cebi/news/grandmothers-income-drop/

The hunt for CEBI people

Kreiner is certainly not alone in advancing research at CEBI; he is supported by many talented researchers who contribute to disseminating the center’s knowledge across various fields.

“Last year, there were five CEBI people on four government commissions, and the business community is watching us and in some cases headhunting the young people even before they have graduated. They end up in N, Danmarks Nationalbank, or Amazon in London, for example. What characterizes our young people is that they’ve been raised to an exceptionally high analytical standard. This is undoubtedly due to the fact that we are a basic research center with ample resources, where one has the opportunity to think big and pursue many paths.

“People present crazy ideas. We collaborate with each other, and we have many different skills,” Kreiner says enthusiastically, adding that it’s also important that they have access to vast amounts of data and the opportunity to go out and purchase what they need.

“We try to create a safe environment where you dare to present wild ideas and where you can get help early in the process and test your idea with more experienced researchers.”