ESSAYS ON PUBLIC FINANCE: RETIREMENT BEHAVIOR AND DISASTER RELIEF
by
Thomas Eisensee
INSTITUTE FOR INTERNATIONAL ECONOMIC STUDIES Stockholm University
Monograph Series No. 54
2005 THE INSTITUTE FOR INTERNATIONAL ECONOMIC STUDIES University of Stockholm is an institute for independent scholarly research in the field of international economic relations.
DIRECTOR: Torsten Persson, Professor of Economics DEPUTY DIRECTOR: Mats Persson, Professor of Economics
BOARD OF GOVERNORS: Kåre Bremer, Professor, President, Stockholm University, Chairman Ulf Jakobsson, Director of the Research Institute of Industrial Economics Leif Lindfors, University Director Sven-Olof Lodin, Professor Karl O. Moene, Professor Lars-Göran Nilsson, Professor Mats Persson, Professor Torsten Persson, Professor Michael Sohlman, Executive Director of the Nobel Foundation Eskil Wadensjö, Professor
RESEARCH STAFF AND VISITING FELLOWS 2004/2005: Professors Natalie Pienaar Davide Ticchi Lars Calmfors José Mauricio Prado, Jr. Università degli Studi di Urbino "Carlo Bo" Harry Flam Virginia Queijo Harald Uhlig John Hassler Zheng (Michael) Song Humboldt University Henrik Horn Ulrika Stavlöt Justin Wolfers Assar Lindbeck Mirco Tonin University of Pennsylvania Mats Persson Gisela Waisman Joseph Zeira Torsten Persson Hebrew University Jerusalem Peter Svedberg Fabrizio Zilibotti Visiting Fellows Gino Gancia Visiting Professors University Pompeu Fabra Per Krusell Martín Gonzalez-Eiras Kjetil Storesletten Universidad de San Andrés Jean Imbs University of Lausanne and Research Fellows London Business School Nicola Gennaioli Paul Klein Ethan Kaplan University of Western Ontario Jesper Lindé (visiting) Jo Thori Lind Dirk Niepelt University of Oslo David Strömberg Egil Matsen Jakob Svensson Norwegian University of Science and Technology, Trondheim Graduate Students Andrea Moro Martin Bech Holte University of Minnesota Martina Björkman Anders Olofsgård Alessandra Bonfiglioli Georgetown University Thomas Eisensee Gérard Roland Giovanni Favara University of California, Berkeley Daria Finocchiario Betsey Stevenson Erika Färnstrand University of Pennsylvania Mathias Herzing Lars E.O. Svensson Anna Larsson Princeton University Martin Ljunge
MAIL ADDRESS: S-106 91 STOCKHOLM, SWEDEN STREET ADDRESS: Universitetsvägen 10 A, 8th floor ESSAYS ON PUBLIC FINANCE: RETIREMENT BEHAVIOR AND DISASTER RELIEF
by
Thomas Eisensee
INSTITUTE FOR INTERNATIONAL ECONOMIC STUDIES Stockholm University
January 2006 © Copyright Thomas Eisensee, 2006. All rights reserved.
Institute for International Economic Studies Stockholm University
ISBN 91-7155-197-2
Printed by Akademitryck AB Edsbruk, Sweden 2006 Doctoral Dissertation Department of Economics Stockholm University ABSTRACT
This thesis consists of three self-contained essays. The …rst essay is an empirical analysis of the relationship between news coverage of disasters and the provision of disaster relief. The two last essays deal with the relationship between …scal policy and the retirement decision. News Droughts, News Floods and U.S. Disaster Relief studies the mass media’s in‡uence on the U.S. government response to approximately 5,000 natural disasters in developing countries in 1968-2002. These disasters took around 63,000 lives and a¤ected 125 million people per year. Given the huge losses involved, it is essential that disaster relief is provided to those most in need. We show that U.S. disaster relief depends on the occurrence of other newsworthy events at the time of the disaster, such as the Olympic Games or the O.J. Simpson Trial, which are obviously unrelated to need. We argue that the only plausible explanation for this is that relief decisions are driven by news coverage of disasters, and that this news coverage might be crowded out by other newsworthy material. Fiscal Policy and Retirement in the Twentieth Century proposes a model that explains the trend in labor supply among older workers through changes in …scal pol- icy, including social security. The model emphasizes the general equilibrium e¤ects of …scal policy on retirement behavior. In particular, the radical shift in …scal policy at the beginning of the century raised the returns to savings, which induced workers to retire earlier. The model predicts a large change in the retirement age upon the introduction of social security, while subsequent increases in replacement rates are shown to have a small impact on retirement. Speci…cally, the retirement elasticity is found to be a decreasing and convex function of the replacement rate. The essay re-introduces social security as a major determinant of retirement behavior in the second half of the twentieth century, while simultaneously o¤ering an explanation to the two main puzzles in the literature: (i) the small contemporary retirement elasticities and (ii) the drop in the retirement age prior to the introduction of social security. Sustainable Fiscal Policy and the Retirement Decision concerns the sustainability of …scal policy in aging economies and the retirement decision. The essay develops an applied general equilibrium overlapping generation model calibrated to the U.S.
iii economy, where retirement behavior is endogenous and current …scal policy is a response to future demographic developments. Three distinguishing sustainable policies are analyzed: (1) raising taxes only (2) reducing the replacement rate only and (3) raising the Full Retirement Age (FRA) only. All policies are found to have a substantial impact on retirement behavior. In particular, sustaining …scal policy will result in falling interest rates, inducing a general delay in retirement. This general equilibrium e¤ect on retirement behavior can be substantially larger than the direct e¤ect of changing social security incentives. However, although the delay in retirement reduces the burden of an aging population, the required …scal adjustments are large. The reason is that U.S. social security is roughly actuarially fair, which implies that delayed retirement only has a small e¤ect on public co¤ers.
iv ACKNOWLEDGMENTS
I would like to express my gratitude to all those who gave me the possibility to complete this thesis. I want to thank the Institute for giving me the opportunity to work here as a research assistant and later as a graduate student. My gratitude goes especially to my advisors, Fabrizio Zilibotti and Kjetil Storesletten: Thanks for sharing your knowledge, creative ideas and great enthusiasm. Not least, I am grateful for your support and patience. I am also indebted to my co-author David Strömberg whose dedication and e¤ectivity is highly contageous. It has been a great joy and inspiration to work with you. I would also like to thank the Wallis Institute at University of Rochester for their hospitality during my 6 months stay and Per Krusell for several insightful discussions. Also, thanks to the crowd of graduate students in Rochester who gave Gabriela and I a very hearty welcome. Warm thanks to all my teachers, collegues and friends who has made life at the Institute more enjoyable. A special thanks goes to Annika Andreasson, Conny Olovsson, Ulrika Stavlöt and Mathias Herzing for their support and inspiration. Editorial and administrative assistance from Christina Lönnblad and Annika An- dreasson has been deeply appreciated. For …nancial support, I thank Tore Browaldh’s Foundation, Jan Wallander’s and Tom Hedelius’ Foundation and Finanspolitiska Forskningsinstitutet. My greatest gratitude belong to my wife, Gabriela, and daughter, Clara; your constant support, patience and encouragement has been invaluable in the completion of this thesis.
v vi TABLE OF CONTENTS
Chapter 1: Introduction 1
Chapter 2: News Droughts, News Floods and U.S. Disaster Relief 5
Chapter 3: Fiscal Policy and Retirement in the Twentieth Century 49
Chapter 4: Sustainable Fiscal Policy and the Retirement Decision 83
vii viii !F9SWCU
'QWURBXAWGRQ
0C`V 9QB "GV9VWCU 4CIGCD ! " # $ $ " $ % &'((( )*+ , $ - . / 0
) *
/ 0 1 12 # 3 % 3 $ 4 5 6 1 7 1 # $
$GVA9I 2RIGAb 9QB WFC 4CWGUCPCQW "CAGVGRQ 8 9 8 7# '
7# : 7# ;< )=(( &' # - 88 " # $ 8 # $ > $ 88 ? 7# $ *(@ *((( A*@ *(+( $ " 7# # % /)0 $ /*0 /'0 " B 9 /"B90 A
5 "B9 - > 7# 7# $ ++ A*@ "B9 ;' : !F9SWCU
0C`V "URXEFWV 0C`V $IRRBV 9QB 7 5 "GV9VWCU 4CIGCD
'QWURBXAWGRQ
5 )=== *;< A(((( 1 )+ $ - - # 9 # > ? - - # $ 7# 9 8 / *+( A(((( 0 9 7# 9 B " ? 7# - 7# , 9 . 7
> # C 3 D . E 2 - # " 8 F ? GC
+ &
9 ! 3 > H 4 , 7# $ 3 $ +((( )=&< *((* ? B . /?B. 0 1 )+( &'((( )*+ 9 )( *( 7#9 4 1! " 9 /1" 90) 8 7# > /9:? ?:# I:? ?II0 J I 9 1" 9 3 * $ - - # 1 12 # . 8 3 1 1 K 1 *A(( 1 3 1
) 3 1" 9 3 5 > * 3 L L ;
' 3 " 1 ' )==+ > 12 # 9:? ?:# I:? )& '( M )==+ ; # I:? ?:# / 0 9:? A # 3 3 7# # 7# 9 M M 1 7# / " *)0 3 $ 9 " A( ! I$ . $
' . , 55 /)==(0 < .22 .2 .18 .16 Share disasters receiving relief .14 p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b 4CIGCD 9QB 1$" 7# 1.? *((* 1.? 7# '<&= 7# 7# )'<* '+; /1.? *((+0 3 1! " 9 /1" 90 )=&< *((* 1" 9 ! 7# 9 /7#9 0 ,$ - 7# , " $ 7# 1! " D 1" 9 9 1" 9 *(@ 7# 1" 9 7# *((* 1 1" 9 1 )=&< *((* 1" 9 )= *< )( # ! " $ 3 ( ! " ?B. )* 9 1" 9 9 7# 9 / ? 7# 5 0 7# 5 7# 9 # 9 ? 5 7# +(((( / *((* 7# *+(((0 # 7#9 > /7# 9 *((+0 % /)0 /*0 8 /'0 7# K 4 1" 9 # ) 9 $ 1" 9 *'+' *& 0C`V !RYCU9EC 1 $ 7# J I 9 /JI90 JI9 '(((( ;((((( > 7# /9:? ?:# I:? ?II0 )=&<)) I N * PA( 3 / L L0 " $ ?B. 9 5 *& *((* 3 JI9 L9 L L. L)* 5 *A 9 ; *((* / *PA( 0 )) ?II 1 )==+ / 0 )* K )' .2 .15 .1 Fraction .05 0 0 10 20 30 40 date_dist " **% I I )( " ** *( !UR`BGQE 1XW RD "GV9VWCU 0C`V $ $ / 9:? ?:# I:? ?II0 - 1 K )< 1 K )=&< 1 5$ ? *((* # G ? 1 I I *AA' L1 L 1 )A 5 Winter Olympics, Summer Olympics, Albertville February 8-23 Barcelona, July 25-August 9 4 3 2 1 Number of stories about olympics about stories Number of 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Day of year, 1992 " *'% 1 K )==* K " *' 1 )==* 1 K 9 " < *' : 2 *+ 9 = 9 $ 1 1 1 K '& 1 : I > " ** ? 1 K # " ** B = /AA< $0 8 1 / 0 / 0 3 N 3 )+ 1 A( *( " A )=&< *((' 3 * /=( 0 # )) *(() - # )) $ $ I , 3 $ 5 2 , # I " $ " + A(+ / 5 )+ *(()M9 *' *((*0 8 , )=&< *((* 9 > A(+ 7# ? # /9 ) *(()9 )) *(()0 $ # )) *(() # ? I : /9 * *((*M5 )( *((*0 D > > 9 A( A( - *' News pressure 0 500 1000 1500 2000 2500 22 a u g 19 6 8 15oct1969 01jan1970 28sep1970 16 j u l1 9 71 09jan1972 12feb1973 01mar1974 01jan1975 03nov1975 13 j u l1 9 76 14jul1977 Figure 4: 19nov1978 31mar1979 01jan1980 10aug1980 Daily newspressure 30mar1981 04aug1982 25oct1983 12jul1984 01jan1985 30jun1985 Date 29jan1986 26feb1987 (minutes), byday 09mar198922dec1988 01jan1990 23dec1989 04aug1990 27feb1991 16jul1992 17 j a n1 9 9 3 17jan1994 01jan1995 03oct1995 18jul1996 23dec1997 16dec1998 01apr1999 01jan2000 26nov2000 13sep2001 11sep2002 14aug2003 01jan2005 0 10 20 30 01apr2001 Figure 5:News Pressure(minutes) during405 days,March152001 –Apr232002,byday U.S.-China Spy Plane Incident al esrsueNewspressure Mean Daily Newspressure Weighted Newspressure Daily Newspressure McVeigh Execution Postponed 01jul2001 Allison hits Texas McVeigh Execution New Policy on Stem Cell Research 01oct2001 9/11 Attacks date Invasion of Afghanistan Anthrax Bush Address to UN Plane Crash Flight 587 Afghanistan: Kabul Falls 01jan2002 Afghanistan: Kandahar Falls Osama Bin Laden Video Tape Afghanistan: Tora Bora Falls Enron Bankruptcy 01apr2002 Afghanistan: Operation Anaconda Bethlehem: Siege at Church of Nativity )< - A( /$ 0 " ** " + I 8 4CVXIWV " " 9 $ 8 " 5SCAGdA9WGRQ 1 " ( / 0 4 ( ( ( ( /*)0 ( ( Q R ( ! " $ B ( ) ( ( /**0 ( ( ( ( 1" 9 Q R 3 # ( / 0 J 4 ( ( ( ( ( /*'0 )= ) ( ( /*A0 ( ( 1 $ / 0 9 9 ? 9 " " " /*+0 " /*&0 /*;0 7 # G # ( ( , *( / 0 " ? 3 9 &R` WFC 9Y9GI9@GIGWb RD RWFCU QC`V 9fCAW BGV9VWCU QC`V 9QB UCIGCD 3 $ A /*+0 /*&0 9 $ - J )( )& )* B )( *( 8 5 ! 1 + & )' ? ! ? J 8 AA ? J # $ )' ! (+ 1 K *) )A ! 3 I " B 7#9 9 M S ! ! " 9 / 0 ! " $ + &R` QC`V 9fCAWV BGV9VWCU UCIGCD 3 $ & 8 1G# A *= ! *= )' )+ ! " )A % . $ . . $ . J $ ** ! " " " $ 1 " & # $ " $ =( <( 1" 9 )( )( 3 (+ ? J ! *' (+ 3 ) ( 8 / 0 ? J 9 3 )' - J D &< J 1G# 9 J *' 1 .8 .6 .4 .2 0 0 .2 .4 .6 .8 1 Predicted probability disaster in news (deciles) Share receiving relief Share in news 45 degree line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b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a 3 3 8 - : 3 2X@IGA 9AWGRQ " G ! ) : I$ ! " 3 G 'A 7# $ " " $ " 9 H $ 3 ( ( $ : ( $ 8 3 9 4 9 - '+ 8)< 9 /*<0 - 8RWGQE 9QB GQDRUP9WGRQ " G ! ) I$ 9 ! W ! " 7# - $ W " W " W )< 9 8 1 ")$20 9 " K 1 ")$20 1 " " )$201 # )$20 1 '& 4 9 9 $ " ( 9 - /*=0 9 4 J 3 ! " 1 2 1 2 # W 1 2 9 2 2 $ / 0 $ / 0 '; G 1 W " 1 1 1 2 2 9 8 - '< Table 1: Summary Statistics for Disasters Number of Share of Killed per Affected per Share receiving Disaster type disasters disasters disaster disaster OFDA relief Flood 1 675 0.32 170 1 724 851 0.22 Storm 1 175 0.23 646 601 490 0.17 Epidemic 737 0.14 249 27 528 0.12 Earthquake 559 0.11 1 522 173 015 0.21 Drought 326 0.06 18 657 5 740 623 0.30 Landslide 310 0.06 84 38 789 0.06 Fire 129 0.02 19 69 552 0.13 Cold wave 114 0.02 103 46 656 0.01 Volcano 102 0.02 853 39 008 0.27 Infestation 47 0.01 na 1 100 0.68 Food shortage 38 0.01 4 293 734 630 0.13 Total 5 212 1.00 590 1 166 505 0.19 QAR Chapter 2. News Droughts, News Floods and U.S. Disaster Relief 39 Table 2: Two largest daily news pressure dates and main story, by year Year Date Main News Story 2003 14 Aug New York City Blackout 22 Mar Invasion of Iraq: Day 3 2002 11 Sep 9/11 Commemoration 24 Oct Sniper Shooting in Washington: Arrest of Suspects 2001 13 Sep 9/11 Attack on America: Day 3 12 Sep 9/11 Attack on America: Day 2 2000 26 Nov Gore vs. Bush: Florida Recount • Certification by Katherine Harris 8 Dec Gore vs. Bush: Florida Recount • Supreme Court Ruling 1999 1 Apr Kosovo Crisis: U.S. Soldiers Captured 18 Jul Crash of Plane Carrying John F. Kennedy, Junior 1998 16 Dec U.S. Missile Attack on Iraq 18 Dec Clinton Impeachment 1997 23 Dec Oklahoma City Bombing: Trial 31 Aug Princess Diana’s Death 1996 18 Jul TWA Flight 800 Explosion 27 Jul Olympic Games Bombing in Atlanta 1995 3 Oct O.J. Simpson Trial: The Verdict 22 Apr Oklahoma City Bombing 1994 17 Jan California Earthquake 18 Jun O.J. Simpson Arrested 1993 17 Jan U.S. Missile Attack on Iraq 20 Apr Waco, Texas: Cult Standoff Ends in Fire 1992 16 Jul Perot Quits 1992 Presidential Campaign 1 May Los Angeles Riots 1991 27 Feb Gulf War: President Bush Declares Kuwait Liberated 17 Jan Gulf War: Operation Desert Storm Launched 1990 4 Aug Iraq Invasion of Kuwait: Day 4 8 Aug Iraq Invasion of Kuwait: Mobilisation of U.S. Troops 1989 9 Mar Senate Rejection of Tower Appointment to Secretary of Defense 23 Dec Romania Revolution 1988 22 Dec Pan Am Plane Crash 14 Dec Arafat Condemns Terrorism and Accept Israel’s Right to Exist 1987 26 Feb Iran Arms Scandal: Tower Commission Report 18 May USS Stark Attack in Persian Gulf 1986 29 Jan Challenger Explosion 15 Apr U.S. Attack on Libya 1985 30 Jun TWA Flight 847 Hijacking: Release of Hostages 29 Jun TWA Flight 847 Hijacking: Release of Hostages 1984 12 Jul Ferraro as Vice President Candidate 16 Aug Delorean Verdict 1983 25 Oct U.S. Invasion of Grenada: Day 1 3 Sep USSR Downing of Korean Commercial Flight 1982 4 Aug Israel Invasion of Lebanon 2 Jan Poland: Martial Law 1981 30 Mar Ronald Reagan Assassination Attempt 13 Dec Poland: Martial Law Declared by Wojchiech Jaruzelski 1980 10 Aug Hurricane Allen in Texas 26 Dec Iran Hostage Crisis: Iran Release Film of Hostages A( 1979 31 Mar Three Mile Island Nuclear Accident 15 Dec Iran Hostage Crisis: Departure of Shah from U.S. Announced 1978 19 Nov Guyana Incident: Sect Mass Suicide 6 Aug Death of Pope Paul VI 1977 14 Jul New York City Blackout 11 Aug Serial Killer David Berkowitz Arrested 1976 13 Jul Democratic Convention 9 Jun Jimmy Carter Wins in Primaries 1975 3 Nov Nelson Rockefeller Decides Not to Run for Vice President 14 May Mayaguez Incident: U.S. Attacks 1974 1 Mar Watergate Indictments Announced 21 Jul Turkey Invades Cyprus 1973 12 Feb Vietnam War: U.S. Prisoners of War Released 24 Jan Vietnam War: Cease-Fire Agreement Reached 1972 9 Jan Howard Hughes Telephone Conference 28 May Nixon Visit in USSR: SALT I signed 1971 16 Jul Nixon Announces Trip to China 16 Aug Nixon Suspends Convertibility from Dollars to Gold 1970 28 Sep Gamal Abdel Nasser Dead 7 Sep Dawson’s Field Hijackings: Blow Up of Planes 1969 15 Oct Vietnam Anti-War Demonstration (Moratorium) 28 Mar Eisenhower Dead 1968 22 Aug USSR Invades Czechoslovakia: Day 2 1 Nov October Surprise: Vietnam Bombing Halt Note: Ordered by daily newspressure Table 3. Summary statistics Variable Observations Mean Std. Dev. Min Max relief 5 212 0.19 0.39 0 1 news 5 212 0.12 0.32 0 1 killed 3 714 590 9 143 1 300 000 affected 4 004 1 092 508 9 858 292 1 300 000 000 news pressure 5 212 7.73 1.22 4.56 14.32 Olympics 5 212 0.02 0.09 0 0.77 US ally 5 212 0.32 0.47 0 1 A) Relief pe. Robust disaster ty Dependent variable: Relief missing values and missing values and News 0.0495 0.0442 0.0148 0.0394 (0.0034)*** (0.0037)*** (0.0020)*** (0.0020)*** News 0.0604 0.0582 0.0121 0.0376 (0.0040)*** (0.0044)*** (0.0024)*** (0.0024)*** de of fixed effects for the interaction Dependent variable: I II III IV V VI -0.0163 -0.0172 -0.0143 -0.0119 -0.0094 -0.0078 -0.1080 -0.0849 -0.1111 -0.1232 -0.1071 -0.1098 (0.0470)** (0.0628) (0.0413)*** (0.0521)** (0.0763) (0.0479)** (0.0041)*** (0.0056)*** (0.0037)*** (0.0045)*** (0.0058) (0.0040)** Table 4: Effect of the pressure for news time on disaster News Pressure R-squared Regressions fixed effects. and disaster type include year, month, country OLS regressions. All regressions Linear probability with imputed values (III and VI) also inclu at 1%.standard errors in parentheses:* significant at 10%; ** 5%; *** significant 0.1791 0.3625 0.2861 0.1989 0.4115 0.3726 Olympics log Killed log Affected imputed Log Killed Log imputed imputed Log Affected Observations 5212 2926 5212 5212 2926 5212 A* Affected log Killed -0.0182 -0.0065 -0.0209 -0.4569 (0.0258)(0.3263) (0.0438) (0.5897) log Table 5. Correlations between instruments and the severity of disasters News Pressure ObservationsR-squared Robust fixed effects. type and disaster country month, year, including regressions OLS significant at 10%; ** significant at 5%; *** 1%. in parentheses:* errors standard 3714 0.2615 4004 0.3571 Olympics p-value: F-test of joint insignificance 0.78 0.73 A' (0.42) 1 IV 0.0187 0.0297 (0.0216) (0.0050)*** (0.47) 0.64 VI VII VIII 1 11.1 5.8 11.2 0.51 IV V 0.5378 0.2945 (0.1062)*** (0.0851)*** (0.0942)*** (0.0834)*** OLS (0.0038)*** (0.0050)***(0.0020)*** (0.0046)*** (0.0023)*** (0.0026)*** (0.0132) (0.0044)*** (0.0046)*** (0.0024)*** I II III (0.0200)*** (0.0232)*** (0.0178)*** (0.0329)*** (0.0567)*** (0.2526)*** (0.3478)* (0.2544)*** Relief (p-value) df stage 2 st χ ObservationsR-squared 5212 0.2435 2926 0.4217 5212 0.3798 0.3857 5212 5027 5212 2926 5212 News*abs(Pr(news)-0.5)abs(Pr(news)-0.5) -0.4819 -0.2921 log Killedimputed log Killed 0.0489 0.0378 0.0549 0.0308 0.0107 imputed log Affected 0.0376 0.0444 0.0344 0.0295 log Affected 0.0359 Table 6. Dependent variable: News 0.2859 1 instruments, F-stat, Over-id restrictions, 0.1529All regressions include month, country, and disasteryear, type fixed effects. Regressions imputed with include (III and VI) also values 0.1293 of missing values and disaster type. effects for the interaction fixed parentheses: in errors standard Robust * significant at 10%; ** significant at 5%; *** significant at 1%. 0.2288 0.2549 0.8228 0.6543 0.6746 AA Probit (0.36) 1 , th -50 th Subsamples . In (0.30) 0.85 1 , 25 th -25 th news pressure (0.39) 1.10 1 (0.26) 0.75 1 lie in the percentile regions 0 the percentile lie in (0.43) 1.27 Affected 1 was in the highest third each year. and an OLS regression. In Column II all days with news about Column II all days with In an OLS regression. Killed (0.66) 0.61 News Relief 1 News Pressure percentile). Column VII contains a sub sample with only earthquakes, with only a sub sample Column VII contains percentile). th Relief (0.49) 0.20 1 . In Column III an extreme bias has been intentionally induced in been intentionally bias has . In Column III an extreme , and in Column V it is the average using the weights reported in Figure 2. reported in Figure using the weights is the average , and in Column V it The regression is the 20- is the I II III IV V VI VII VIII IX (0.47) 0.47 1 news pressure 0.8228 0.8351 0.9391 0.8012 0.6726 0.7124 0.7561 0.8505 0.9454 -0.1080 -0.1085 -0.1114 -0.1125-0.1232 -0.1156 -0.1235 -0.1090 -0.1250 -0.1266 -0.1008 -0.1320 -0.1290 -0.1182 -0.1048 -0.1338 -0.1767 -0.1426 -0.0163 -0.0157 -0.0124 -0.0133-0.0119 -0.0155 -0.0116 -0.0143 -0.0104 -0.0092 -0.0193 -0.0242 -0.0085 -0.0082 -0.0174 -0.0126 -0.0125 -0.0135 (0.0470)** (0.0469)** (0.0470)** (0.0470)** (0.0470)** (0.0460)**(0.0521)** (0.0521)** (0.0572)* (0.0520)** (0.0864) (0.0521)** (0.0547)* (0.0521)** (0.0515)** (0.0583)** (0.0893)** (0.0705)** Reference Changes in independent variables (0.0041)*** (0.0040)*** (0.0042)*** (0.0033)*** (0.0036)*** (0.0038)*** (0.0052)***(0.0045)*** (0.0118)** (0.0045)*** (0.0048)*** (0.0046)** (0.0038)** (0.0041)**(0.2524)*** (0.0040)** (0.2595)*** (0.0054)** (0.3225)*** (0.2561)*** (0.0142) (0.2341)*** (0.0051)*** (0.2637)*** (0.2581)*** (0.4597)* (0.0406)*** percentiles th daily news pressure news daily -95 th news pressure , 75 th -75 th in Column VI contains controls contains VI Column in of interaction dummy variables for the log Affected, imputed log Killed and a US Ally, the country was for whether and disaster type missing data, whether indicating as as two well setsvariables of dummy Column IV Column day average of day 50 Olympics ObservationsR-squaredF-test (instr.) 5212 0.1791 11.1Olympics 5212 0.1789Observations 10.5R-squared 5212 0.1779 5212 0.1989 7.4 0.1789Observations 5212 testOver-id 5212 0.1989 0.1795 5212 0.51 11.19 5212 5212 0.1986 0.2969 5212 12.3 5212 0.1987 5212 0.1862 5212 0.1985 10.0 0.2072 3950 5212 0.3851 5212 3473 8.6 5212 0.1835 5212 4266 0.2271 3.4 3950 5212 3473 3910 5209 3446 5209 floods, fires landslides, storms and volcano respectively (omittedrespectively category is killed above 95 disasters have been removed before have been disasters computing the average Table 7. Robustness Reduced form regressions. Dependent variable: News Pressure Reduced form regressions. Dependent variable: News Pressure IV-regressions. Dependent variable: News Robust standard errors in parentheses. * significant at 10%; ** significant at 5%; *** significant at 1%. All regressions country andinclude year, month, from disaster-type I reports the results fixed-effects. Column eruptions. Column VIII excludes observations where A+ 1 3 12 336 806 1 379 2 006 2 563 3 056 39 817 Equal coverage casualties ratio* , and country, year and month fixed month year and , and country, Affected Fixed effects (se) , log Killed news (se) as many casualties as a as volcano, all else equal (country, year, month, and many Share in number affected). number category. the omitted Earthquake is ** Table 8. Newsworthiness of Disasters, by Disaster Type of Disasters, by Disaster Table 8. Newsworthiness VolcanoEarthquakeFireStormFloodLandslide 0.32 0.29EpidemicDrought (0.02) (0.05)Cold wave 0.14 0.14 0.57 0.64Food shortage 0.06 log includes regression effects 0.09The fixed 0.02effects. (0.03) (0.01) a food News, Network Television by the covered being of the same estimated probability have *To (0.09) 0.03 (0.01) 0.03 (**) 0.49 0.06 (0.01)shortage 0.29 (0.01) must have 0.20 39817 0.23 times (0.03) 0.18 (0.01) (0.02) (0.09) (0.03) 0.00 0.16 0.15 (0.03) (0.02) (0.03) (0.10) (0.07) (0.07) A& 1 3 43 46 84 Equal coverage casualties ratio* , and disaster type, year and month fixed year and type, , and disaster Affected Fixed effects (se) , log ) 0.03 (0.04) Killed news (se) Share in times as many casualties as one in Europe, all else equal (disaster type, year, equal (disaster all else as one in Europe, many casualties times as month, and number affected). and number month, ** Europe is the omitted continent. Table 9. Newsworthiness of Disasters, by Continents EuropeS. and C. AmericaAsia 0.18AfricaPacific log includes regression effects The fixed (0.01) 0.18effects. Network News, a disaster Television being covered by the 0.18 of the same estimated probability have *To in the (0.02) 0.12Pacific must have 84 0.03 0.25 0.03 (0.04) (0.01) (0.01 (0.01) 0.04 (**) 0.00 (0.03) (0.04) A; 5 5 4 1 16 10 13 Equal coverage casualties ratio* , and disaster type, country and month and country type, disaster , and Affected Fixed effects (se) , log Killed news (se) Share in Table 10. Newsworthiness of Disasters, by Five-Year period of Disasters, by Five-Year Table 10. Newsworthiness 1968-19721973-19771978-19821983-19871988-1992 0.141993-1997 0.131998-2002 0.12 (0.02) log includes regression effects The fixed 0.06 (0.02)fixed effects. -0.17 0.10 Network News, a disaster Television being covered by the of the same estimated probability (0.02) have *To -0.10 0.11in the (0.02) -0.14 0.13 have 161968 must country, type, (disaster equal 2002, all else as one in casualties as many times (0.01) -0.16 (0.03) affected). and number month, (0.01) -0.10 period. omitted the (0.03) is 1998-2002 ** (0.01) -0.10 (0.02) (0.02) 0.00 (0.02) (0.02) (**) A< !F9SWCU $GVA9I 2RIGAb 9QB 4CWGUCPCQW GQ WFC 6`CQWGCWF !CQWXUb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ermany 50 France 40 US 65+ 30 20 Labor Force Participation Rate (%) Rate Participation Force Labor 10 0 1850 1900 1950 2000 Year " ')% G " D B 5 &+P 7 # " K : ++ &A 7 # " ') &+ )<+( )==( 7 # K : " K ++ &A 7 # /? /)==<00 I ++ &A )=;( E /*((+0 )<+( *((( 7 # B ) " '* &( I )=(( &+ )=;( &( &A " &+ &= )*@ )<+( ;)@ *((( 7 E /*((+0 ) @ Y /@ M @ 0N/) M @ 0 ! " +' 0.9 Ages 75-79 0.8 0.7 Ages 70-74 0.6 0.5 Ages 65-69 0.4 Ages 60-64 0.3 Retirement Rate (%) Ages 55-59 0.2 Ages 50-54 0.1 0 1850 1900 1950 2000 Year " '*% B B 5 9 +( 9 K )<+( *((( 7 # / " ''0* : ;= )=(( ;'= )=)( &=' )=A( 33 )=+( )=&( $ &=' &+A : )=&( )==( &*' *((( - 33 " K /*(()0 &&= )=+( &* )==(4 7 : C # /)==<0 &&= &'' K /*(()0 )=+( )=;( &<+ &*= 9 )=;( K /*(()0 : C # /)==<0 * 9 $ +A ! " 80 78 76 Median Retirement Age 74 72 Age 70 68 Gendell - Social security Blöndal and Scarpetta 66 Gendell - Median 64 62 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 Year " ''% B 9 7 # 5 )=(( *((( $ 9 &+ $ )) )=(( )* )=A( )+ )==( /: /)===00 " M )* )' )= $ " 'A $ ' )<+( $ $ )==( 6FC CARQRPGA PRBCI 9 E /)=<;0 - 5 7# ' E /*((+0 $ ! " ++ 30 25 20 15 10 Expected Percentage of Life Spent in Retirement 5 1850 1900 1950 2000 Year " 'A% .$ 9 G # B /@0 7 # "CPREU9SFGAV $ ! ? ( !(6 2UCDCUCQACV WCAFQRIREb 9QB P9UHCWV D " " 9 $8 ( #(( "( /')0 $ ' ( > /"( #( +& ! " ( #( ) 7 8 ) 5 1 $6%6 %6 $6 1 9 % ! % 6 6 (6"(6!(6 (6 ! "(6 ( B 6 6 $6%6 6 & $6 6%6! & %RYCUQPCQW 9QB VRAG9I VCAXUGWb K $ $ $ $ ' $ ' # 7# 9 ( 1 /" 0 4 / 0 9 ) *6 !(6 ) 6( /'*0 ( ! " +; 6( " ( " " ( 6 ( ( +6 $ ,6 ' 6%6 6$6' 6%6 /''0 %6 $6 : $ $ -6 : -6 -6 6 ' ,6 *6 +6 /'A0 6 6' 'QBGYGBX9IVe @XBECW ARQVWU9GQW 9QB BCAGVGRQ SUR@ICP (6 .(6 .(6 (6 /'+0 (6 (6 4 $ .(6 4 4 5 8 # % 6 ' .(6 6 ("(6 ' ')( (6 5 (6 6 ' .(6 ) 6( (6 5 (6 19 A (6 A 9 % . ;'@ &+ &= )=<= /" )===0 9 )((@ $ 9 % )0 $ '' +(@ $ &* &A *0 $ +< ! " 6( " (6 ! (6 6( 8 ' . K 4 /6 / . " 6 # $' ( /6 . /6 . /'&0 > . 6 ' . 6 (" ' ')( /';0 ( ! /'<0 . /'=0 . /')(0 6 6 (" ( /'))0 6 ( " /')*0 9 /6 . 0 ! /')'0 4 $ /'))0 . /'))0 4 $ 8 I 8 9 /6 . ( /6 . /')A0 #$ > ! " += . 6 ' . ) /')+0 ( /'=0 /')(0 /')'0 "CdQGWGRQ RD #TXGIG@UGXP > 8 K - . ! )+6' 66%6$616-6 "(6(6.(6(6!( $ 6 ' ) "(6(6.(6(6!( 4 $8 /'&0 /')A0 66 ' * " 2$6%6 6 2%6 2$6%6 6 & 2$6 ' $6%6 & $6 $6 +6 !(36(36 (3 A $ ' 4 , + * - 6 6 6 /')&0 6 6 ) ) ,6 /''0 *6 /'*0 + $6 16 -6 16 !(36.(36 &( ! " ')% ? D J D 5 I?-# S *((( D 3 4 5 & $67 K +6676 *6676 ' -6676 !9IG@U9WGRQ 7# *((( ') *((( "CPREU9SFGAV # # 9 /*(('0 *((( &+ *( &A *(@ /##9 /*(('00 2URBXAWGYGWb - 4 /)=='0 - " : " " /*((+0 ! " &) Productivity profile 1,4 1,2 1 0,8 0,6 0,4 0,2 0 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 French (2005) CPS (1999) " '+% D D - - *= " *( &( ? /)===0 - /)=='0 : " '+ " 4 : ? /)===0 *( *= 6CAFQRIREb 9QB 7WGIGWb DXQAWGRQ D " " 6 3 6 /');0 6 6 5 4 3 4 /0 *( &( ') N *((( 7# /7# : ? /)===00 /0 " " (&A - /*((A0 ! 5 &* ! " ? $6 %6 4 7 D /*((A0 5K D /*((*0 / $0 A@ & %RYCUQPCQW K +6 KID *((( /:.9 /*((+00+ 9 # " & ( 6 ( ( 7 " B 9 /"B90 , # # 9 ##9 /)==<0 ; " B 9 /"B90 &+ - &* : 6 "B9 / B.B0 5 &+ / B?0 ;( X < B?NB.B 3 B?NB.B &* KID *((( 9 KID *((( + ? $ / 0 & ; D 9 "B9 < 19 X *((( /##9 /*(()00 ! " &' KID 7# )=== /1.? /*((A0 :.9/*((+00 $ ' 19# $ / 0 $ K $ $ $ ' $ = 6FC#aSCUGPCQW 7# *((( )=(( *((( $ " 9 $ +' " 9 4 4 " # +) $ $ +* 6UCQBV GQ $GVA9I 2RIGAb 8 7 # 3 3 /*(((0 7# / 0 A*@ KID )<+( ;*@ ';+@ )==* ** : )=+* )==* (; @ = $ )==< *((* KID /:.9 *((+0 $ $ *((( $ KID KID &A ! " '*% K .$ )='( *((( D )=(( )='( )=A( )=+( )=&( )=;( )=<( )==( *((( 867 +67 *67 # % % 1.? /*((+0 .BD/*((A0 KNSPNS% :.9/*((+0 I% )=(( NS KNS )='( 3 /)= 5RAG9I 5CAXUGWb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b U9WCV " 9 # 4 - H $ A; )=(( &< )=+( ;; *((( 5 &+P *( &A *@ )=(( *(@ *((( ! " &; 'A% # # 5 . )=(( )='( )=+( )=&( )=;( )=<( )==( *((( ;)(( &*+< &A)' &A*& 2&6 /@0 '&' '+; '<= A*< A)) A'( A*& A( )(; )(& )() (=< (=< (=& (=; )(( $67 ')'(*<*&*&*+*+<*; ' += ))& *+* *<( *=( '*( *=A *&= 4CVXIWV 'A $ 5 $ ') )=(( *& )=&( '&@ A*<@ )=&( 4CWGUCPCQW CF9YGRU 'A # )* I > " '& )='( ;** )=+( ;) 7 )=&( &+ 9 &* )=;( 8 &' &A B * 33 )=<( )=(( 3 " $ > % $ '+ $ " )='( ;** ? '+ )* / 0 &< ! " 80 U.S. Median Retirement Age 78 76 Model with Medicare 74 Baseline Model 72 70 Transitional Analysis 68 66 64 62 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 " '&% . B )=(( *((( 5 )='( )=+( / ;** &;*0 1 $ ))&@ *+*@ / ;** ;;0 8 > '+ 9 )='( )=+( $ : - " ' /0 $ /0 /50 $ # - ;) ! " &= 6 6 '+% # ? B /I S B : S 0 ! 2&6 99 ' ' I% ;( ! " 3 )=&( &A< ? '+ H - $ )=;( &* B?NB.B )=<( $ &*& )=<( )==( 88 9 ? J '+ ) * S $ H " '; I , &*< &A* / A*< AA*0 &' &A N )=<( N ! )==( *((( 3 $ '& *((( )=+( D )='( )=+( ! " ;) -348.5 Approximation -349 Value function at integer ages -349.5 Utility -350 -350.5 -351 41 42 43 44 45 46 47 48 49 Model Age " ';% J B 9 &) &= /5 9 A) A=0 )=<( . *)@ KID )='( =A@ )=+( '&% # ? B /I S 0 )='( )=+( )=+( *((( 2&6 ' ' ! 99 # '+ (9@RU 5XSSIb " '< 9 9 ;* ! " 0.4 1900 0.35 1930 1950 1960 0.3 1970 1980 0.25 1990 2000 0.2 0.15 Hours Worked (Weekly) 0.1 0.05 0 20 30 40 50 60 70 80 Age " '<% 3 - 3 )=(( *((( $ 5K B /*((*0 / " '=0 5K B )<&& )=<+ 7 #)' 6 $ 5RPC BBGWGRQ9I 4CVXIWV " 1 7# )<+( )<+) )' 9 $ ! " ;' Hours worked, US Total Population McGrattan and Rogerson (2004) 40 35 30 1866-75 1876-85 1886-95 25 1896-1905 1906-15 1916-25 20 1926-35 1936-45 1946-55 15 1956-65 1966-75 1976-85 10 5 0 15-24 25-34 35-44 45-54 55-64 65-74 75-99 " '=% - 3 ? 9 7# D )<&& )=<+ *((( 5 '& )A 3 > : 8 > 7 > )=(( 5 # /*(((0 KID H " ')( $ # )A &+ ;A ! " Lump Sum Transfer Function 0.35 0.3 0.25 0.2 0.15 Share of GNP/capita of Share 0.1 0.05 0 0 20 40 60 80 100 120 Age " ')(% 5 9 # KID ? $ *((( 4 5 # /*(((0 " '& 6`R 2XccICV D " # 88 ! " ;+ ';% B . # 9 K S . E D /)==*0 &( &< )=;& )=<< - 3 /)=<+0 +< &' )=&= )=;= - : /)= 6FC 4CWGUCPCQW #I9VWGAGWb 4CYGVGWCB # )=;(4 B " /*((*0 E 5 /*((*0 " /)==<0 '; 5 " 5 /)=<;0 E 5 /*((*0 $ , // - : /)= 78 76 74 72 70 General Equilibrium Age 68 66 64 Partial Equilibrium 62 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 Replacement Rate " '))% 1 B 9 B B 8 1 8 $ /- 3 /)=<+0 : /)=<&0 5 /)=<;00 " ')) *((( )+ LD . L $ LK . L $ 3 5 9 (A* 9 *(@ ' D . + K . " /*(('0 *(@ )+ ! " ;; ' - ; )' 'QWCUCVW 49WCV GQ WFC 2UC<5RAG9I 5CAXUGWb #U9 9 / " ''0 )=(( )=+( $ '* )=(( 7 33 " ')* )=(( )=+( 5K D /*((*0 9 M (;@ )=A+ /"B: /*((+0 M 3 )=(( )='A )='A K )=+( 5K D /*((*0 33 E 3 4 $ D 5K D 4 /*((*0 )=A+ )+@ /"B: /*((+00 " ')* )=(( )=+( ;< ! " 10 Large-company Stocks 9 Long-term Municipal Bonds 8 7 6 5 4 3 2 1 0 1880 1890 1900 1910 1920 1930 1940 1950 " ')*% B B B 9 )=(( )=+( 3 $ - /: /)=<+0 F /)=<<0 ? ? /)==) )==A0 : 1 /)==A0 E /*(((00)& !RQAIXVGRQ # - 88 " # )& 9 /. /)=<+ )=<;0 : /)=<;0 /)==(0 # /)=='0 K /)==A00 - G % ! " ;= $ 8 # $ > $ 88 H " $ 9 $ $ $ /5K D /*((*00 # $ $ <( ! " G@IGREU9SFb Q)R 9 9 2 F /*(((0 D . B ?.DB D I *&)A Q*R :.9 /*((+0 & % '& %( 9 %NNN Q'R :G# /*((+0 ? - ? D $ 7# G : G # 3 ? QAR : K 2 " 6 /*(((0 ) *! % % : 5 Q+R : K /)===0 9 . J B - 2 9 /0 + , ) : D Q&R ? G /)==<0 ), - % % ) . /0012/331 7 ? D Q;R " B : /*((+0 " " 9 7 #% 9 " 1 )=A+ )=+A : K " B # 3 ? *(++)