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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
Lars Calmfors
Harry Flam
John Hassler
Henrik Horn
Assar Lindbeck
Mats Persson
Torsten Persson
Peter Svedberg
Fabrizio Zilibotti
Visiting Professors
Per Krusell
Kjetil Storesletten
Research Fellows
Nicola Gennaioli
Ethan Kaplan
Jesper Lindé (visiting)
Dirk Niepelt
David Strömberg
Jakob Svensson
Graduate Students
Martin Bech Holte
Martina Björkman
Alessandra Bonfiglioli
Thomas Eisensee
Giovanni Favara
Daria Finocchiario
Erika Färnstrand
Mathias Herzing
Anna Larsson
Martin Ljunge
MAIL ADDRESS:
STREET ADDRESS:
Natalie Pienaar
José Mauricio Prado, Jr.
Virginia Queijo
Zheng (Michael) Song
Ulrika Stavlöt
Mirco Tonin
Gisela Waisman
Visiting Fellows
Gino Gancia
University Pompeu Fabra
Martín Gonzalez-Eiras
Universidad de San Andrés
Jean Imbs
University of Lausanne and
London Business School
Paul Klein
University of Western Ontario
Jo Thori Lind
University of Oslo
Egil Matsen
Norwegian University of Science and
Technology, Trondheim
Andrea Moro
University of Minnesota
Anders Olofsgård
Georgetown University
Gérard Roland
University of California, Berkeley
Betsey Stevenson
University of Pennsylvania
Lars E.O. Svensson
Princeton University
S-106 91 STOCKHOLM, SWEDEN
Universitetsvägen 10 A, 8th floor
Davide Ticchi
Università degli Studi di Urbino "Carlo Bo"
Harald Uhlig
Humboldt University
Justin Wolfers
University of Pennsylvania
Joseph Zeira
Hebrew University Jerusalem
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 policy, 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 Andreasson 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
vii
83
viii
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Share disasters receiving relief
.16
.18
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.22
p<5
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(News Drought)
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News pressure, percentiles
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Summer Olympics,
Barcelona, July 25-August 9
0
Number of stories about olympics
1
2
3
4
Winter Olympics,
Albertville February 8-23
Jan
Feb
Mar
Ap r
May
Jun Jul Aug Sep
Day of year, 1992
Oct
Nov Dec
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0
500
News pressure
1000
1500
2000
2500
22aug1968
15oct1969
01jan1970
28sep1970
16jul1971
09jan1972
12feb1973
01mar1974
01jan1975
03nov1975
13jul1976
14jul1977
30jun1985
29jan1986
D ate
Figure 4: Daily news pressure (minutes), by day
19nov1978
31mar1979
01jan1980
10aug1980
30mar1981
04aug1982
25oct1983
12jul1984
01jan1985
26feb1987
22dec1988
09mar1989
23dec1989
04aug1990
27feb1991
01jan1990
16jul1992
17jan1993
17jan1994
01jan1995
03oct1995
18jul1996
23dec1997
16dec1998
01apr 1999
01jan2000
26nov2000
13sep2001
11sep2002
14aug2003
01jan2005
0
10
20
30
0 1oc t20 01
d ate
Daily Ne wspres s ure
W eigh ted News p re ss ure
0 1ju l2 001
01a pr20 02
N ews pre ss ure
M ea n Da ily N ews pres sure
0 1jan 200 2
Figure 5: News Pressure (minutes) during 405 days, March 15 2001 – Apr 23 2002, by day
01 apr2 001
U.S.-China Spy Plane Incident
McVeigh Execution Postponed
Allison hits Texas
McVeigh Execution
New Policy on Stem Cell Research
9/11 Attacks
Invasion of Afghanistan
Anthrax
Bush Address to UN
Plane Crash Flight 587
Afghanistan: Kabul Falls
Afghanistan: Kandahar Falls
Osama Bin Laden Video Tape
Afghanistan: Tora Bora Falls
Enron Bankruptcy
Afghanistan: Operation Anaconda
Bethlehem: Siege at Church of Nativity
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0
.2
.4
.6
.8
1
#! %" !$#" %" " ""#! 0
.2
.4
.6
.8
Predicted probability disaster in news (deciles)
Share receiving relief
45 degree line
1
Share in news
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9 HGDA;Q E9C=J G:K=JN=K L@9L 9 <AK9KL=J AK ;GN=J=< AF L@= F=OK
@= GJ K@= J=9DAR=K L@9L
AL AK EGJ= DAC=DQ L@9L J=DA=> =ZGJLK OADD 9DKG := ;GN=J=< #=F;=
L@=J= AK 9F AF;J=9K=
AF L@= AF;=FLAN=K LG HJGNA<= J=DA=>
GL@ L@=K= EG<=DK @9N= L@= AEHDA;9LAGF L@9L <AK9KL=JK L@9L 9J= AF L@= F=OK 9J=
EGJ= DAC=DQ LG J=;=AN= J=DA=> /@AK AK L@= @QHGL@=KAK L@9L O= L=KL =EHAJA;9DDQ 2= <G
FGL 9LL=EHL LG =EHAJA;9DDQ <AKLAF?MAK@ :=LO==F L@= EG<=DK
:(1/) ')9/43
/@= LAEAF? G> L@= EG<=D AK L@= >GDDGOAF? !AJKL
9 <AK9KL=J G> K=N=JALQ G;;MJK /@=
E=<A9 ;@GGK=K O@=L@=J LG ;GN=J L@= <AK9KL=J '=L L@= AF<A;9LGJ N9JA9:D= ;4D@ =IM9D A> L@AK AK <GF= :Q L@= E=<A9 9K=< KGD=DQ GF L@= AF>GJE9LAGF HJGNA<=< :Q
L@= E=<A9
NGL=JK E9Q DG::Q >GJ J=DA=> LG := HJGNA<=< )=PL
L@= HGDA;Q E9C=JK L9C=
L@= <=;AKAGF LG HJGNA<= J=DA=> /@= N9JA9:D= ?49845 AF<A;9L=K O@=L@=J J=DA=>
AK ?AN=F !AF9DDQ
NGL=JK ;9KL L@=AJ NGL=K :9K=< GF L@= HGDA;Q 9;LAGF
2= 9KKME= L@9L L@= MLADALQ ?9AF >JGE <AK9KL=J J=DA=> LG := AF;J=9KAF? AF L@= K=N=JALQ
G> L@= <AK9KL=JK '=L B ?49845 := L@= MLADALQ G> <AK9KL=J NA;LAEK D=KK L@= ;GKL G>
J=DA=> /@= ?9AF >JGE J=DA=> AK
B ?49845 B ?49845 ?49845 B #! %" !$#" %" " ""#! O@=J= B /@MK
L@= D9J?=J L@= <AK9KL=J
L@= D9J?=J L@= E9J?AF9D MLADALQ G> 9A<
0. NGL=JK 9J= 9DLJMAKLA; 9F< ;9J= 9:GML L@= O=D>9J= G> L@= <AK9KL=J NA;LAEK /@=
=PH=;L9LAGF G> L@= F=L :=F=SL >JGE J=DA=> AK
# ?49845 B ;4D@ ?49845 B A> ;4D@ B
A> ;4D@ O@=J= B AK L@= =PH=;L=< F=L :=F=SL >JGE J=DA=>
FGL CFGOAF? L@= K=N=JALQ G> L@=
<AK9KL=J GJ O@=L@=J J=DA=> O9K HJGNA<=<
B # ?49845 B >L=J @9NAF? G:K=JN=< 9 <AK9KL=J O@=J= B 9F 9;LAGF ?JGMH 9HHJG9;@=K
L@= AF;ME:=FL HGDALA;A9F /@=J= 9J= 9 FME:=J G> 9;LAGFK L@= ?JGMH ;GMD< L9C= LG
HJ=KKMJ= L@= HGDALA;A9FK LG OGJC >GJ J=DA=> :=AF? HJGNA<=< L@=Q ;GMD< <=EGFKLJ9L=
GJ =PHD9AF L@9L L@=AJ NGL=K <=H=F< GF L@= J=DA=> <=;AKAGF 2= KAEHDQ EG<=D L@AK 9K
GZ=JAF? LG H9Q ;9EH9A?F ;GFLJA:MLAGFK 2 A> J=DA=> AK HJGNA<=<
$F L@= =D=;LAGF
9 NGL=J 8 OADD NGL= LG J==D=;L L@= AF;ME:=FL A>
2 /@= L=JE ;9HLMJ=K NGL=J HJ=>=J=F;=K GF 9DD GL@=J AKKM=K
O@A;@ O= LJ=9L 9K =P
G?=FGMK
9F< ;9HLMJ=K 9 ;GEEGF HGHMD9JALQ K@G;C GL@ 9F< 9J= MFA>GJEDQ
<AKLJA:ML=< GF L@= AFL=JN9D >JGE LG /@= L=JE 2 AK L@= =Z=;L G> L@= ;9E
H9A?F ;GFLJA:MLAGFK GF =D=;LAGF GML;GE= /@= HJG:9:ADALQ G> L@= AF;ME:=FL :=AF?
J==D=;L=< AK L@=J=>GJ=
* ;4D@ ?49845 2
HJGNA<=< L@9L L@= H9J9E=L=JK 9J= KM;@ L@9L L@= 9:GN= =PHJ=KKAGF DA=K :=LO==F R=JG
9F< GF=
2= 9KKME= L@9L L@= E:9KK9<GJ ;9J=K 9:GML L@= <AK9KL=J NA;LAEK
:ML 9DKG HMLK
9 O=A?@L GF NGL=J KMHHGJL >GJ L@= AF;ME:=FL
* /@AK ;GMD< := :=;9MK= L@=Q
;9J= 9:GML L@= >MF<AF? G> L@= J=DA=> HJG?J9E
9F< L@AK AK AF;J=9KAF? AF ALK H9QGZ LG
L@= AF;ME:=FL $L ;GMD< 9DKG := :=;9MK= L@=AJ >MLMJ= ;9J==J <=H=F<K GF @GO O=DD
L@=Q E9F9?= L@= J=DA=> HJG?J9E AF L@= AF;ME:=FLVK AFL=J=KL /@= E:9KK9<GJ >9;=K
9F GHHGJLMFALQ ;GKL G> <=;D9JAF? L@= <AK9KL=J #= GJ K@= <=;D9J=K 9 <AK9KL=J
?49845 A>
B ;4D@ 2 #! %" !$#" %" " ""#! /@= D=N=D G> ;9EH9A?F ;GFLJA:MLAGFK ;9F := =F<G?=FAR=< /@=F
L@= E:9K
K9<GJ <=;D9J=K 9 <AK9KL=J A>
;4D@ B #=F;=
L@= HJG:9:ADALQ L@9L J=DA=> AK HJGNA<=< AK @A?@=J >GJ <AK9KL=JK L@9L 9J= AF L@=
F=OK
&49/3- '3* /3,472'9/43
/@= LAEAF? G> L@AK EG<=D AK L@= >GDDGOAF? !AJKL 9 <AK9KL=J G> K=N=JALQ G;;MJK /@=
E=<A9 ;@GGK=K O@=L@=J LG ;GN=J L@= <AK9KL=J '=L L@= AF<A;9LGJ N9JA9:D= ;4D@ =IM9D A> L@AK AK <GF= :Q L@= E=<A9 )=PL
L@= E:9KK9<GJ ;@GGK=K O@=L@=J LG
HJGNA<= J=DA=> /@= N9JA9:D= ?49845 AF<A;9L=K O@=L@=J J=DA=> AK ?AN=F /@=F
L@= E=<A9 ;@GGK=K O@=L@=J LG ;GN=J L@= <AK9KL=J 9?9AF
;9HLMJ=< :Q L@= AF<A;9LGJ
N9JA9:D= 5 <99<DB=8;4D@ $> AL <G=K KG
AL 9DKG J=HGJLK GF O@=L@=J J=DA=> O9K
?AN=F !AF9DDQ
NGL=JK ;9KL L@=AJ :9DDGLK :9K=< GF L@= AF>GJE9LAGF HJGNA<=< :Q L@=
E=<A9
/@= ?9AF >JGE J=DA=> AK EG<=DD=< 9K :=>GJ= 0. NGL=JK 9J= GF;= EGJ= 9DLJMAKLA;
9F< ;9J= 9:GML L@= O=D>9J= G> L@= <AK9KL=J NA;LAEK #GO=N=J
L@=AJ =PH=;L9LAGF G>
L@= :=F=SL >JGE J=DA=> AK FGO
# ?49845 B ?49845 B A> 5 <99<DB=8;4D@ = ;4D@ B A> ;4D@ 9F< 5 <99<DB=8;4D@ # = ;4D@ B A> ;4D@ 9F< 5 <99<DB=8;4D@ KKMEAF? L@9L AK MFA>GJEDQ <AKLJA:ML=< :=LO==F R=JG 9F< GF=
L@= HJG:9:ADALQ G> ?ANAF? J=DA=>
=IM9DK
KKME= L@9L L@= ;GKL >GJ L@= 9;LAGF ?JGMH LG ;GDD=;L >MF<K AK "AN=F L@AK
L@= 9;LAGF ?JGMH OADD
GZ=J L@= HGDA;Q E9C=J L@= ;GFLJA:MLAGF O@A;@ KGDN=K
O@A;@ AK
.G L@= HJG:9:ADALQ G> HJGNA<AF? <AK9KL=J J=DA=> AK
#! %" !$#" %" " ""#! /@= >MF;LAGF = ;4D@ AK L@= NGL=JKV 9KK=KK=< HJG:9:ADALQ L@9L <AK9KL=J J=DA=>
AK HJGNA<=<
?AN=F L@9L E=<A9 @9K J=HGJL=< F9DG?GMKDQ
= ;4D@ AK L@=
9KK=KK=< HJG:9:ADALQ A> L@= E=<A9 <A< FGL J=HGJL GF L@= <AK9KL=J
NGL=J 8 OADD NGL= LG J==D=;L L@= AF;ME:=FL HGDALA;A9F A> @AK GJ @=J =PH=;L=<
MLADALQ AK D9J?=J L@9F KGE= J=K=JN9LAGF MLADALQ
# ?49845 B 9F< L@= HJG:9:ADALQ L@9L L@= AF;ME:=FL AK J==D=;L=< AK
* ?49845 # ?49845 B /@= E:9KK9<GJ GF;= EGJ= ;9J=K 9:GML L@= =Z=;L G> L@= <AK9KL=J >MF<K
:ML 9DKG
HMLK 9 O=A?@L GF NGL=J KMHHGJL #= GJ K@= <=;D9J=K 9 <AK9KL=J A>
* ?49845 B #
?49845
GJ =IMAN9D=FLDQ
B O@=J= AK L@= E:9KK9<GJVK H=J;=AN=< HJG:9:ADALQ L@9L L@= <AK9K9KL=J AK ;GN=J=< AF
L@= E=<A9 9>L=J L@= J=DA=> <=;AKAGF 1GL=K 9J= GFDQ 9Z=;L=< :Q L@= J=DA=> <=;AKAGF A>
L@= J=DA=> =ZGJLK 9J= ;GN=J=< :Q L@= E=<A9
O@A;@ @9HH=FK OAL@ HJG:9:ADALQ 2= FGO <AK;MKK L@AK HJG:9:ADALQ G> J=DA=> F=OK ;GN=J9?= /@= E=<A9 OADD AFALA9DDQ
;GN=J L@= <AK9KL=J A> AL AK KMY;A=FLDQ F=OKOGJL@Q 9F< A> DALLD= GL@=J F=OK AK 9JGMF<
!GJE9DDQ
;4D@ A> O@=J= AK L@= K=N=JALQ G> L@= <AK9KL=J
AK L@= 9N9AD9:ADALQ G> GL@=J F=OKOGJL@Q
E9L=JA9D
9F< 9J= GL@=J >=9LMJ=K G> F=OKOGJL@AF=KK KM;@ 9K @GO <J9E9LA; =N=FL
L@= =N=FL AK 9F< A> AL HJGNA<=K ?GG< H@GL9?= .AEAD9JDQ
L@= E=<A9 OADD ;GN=J L@=
<AK9KL=J J=DA=>
5 <99<DB=8;4D@ A> C=Q >=9LMJ= AK L@9L L@= F=OKOGJL@AF=KK H9J9E=L=JK
9F< 9J= HGKALAN=DQ
;GJJ=D9L=< /@AK HGKALAN= ;GJJ=D9LAGF ;GMD< 9JAK= :=;9MK= G> L@= SP=< ;GKL AF L@=
F=OK L=;@FGDG?Q =? K=F<AF? J=HGJL=JK
:=;9MK= G> <AK9KL=J SP=< ;@9J9;L=JAKLA;K
=? ?GG< H@GL9?=
GJ :=;9MK= 9F AFALA9D KLGJQ :MAD<K MH NA=O=J AFL=J=KL
#! %" !$#" %" " ""#! /@AK AEHDA=K L@9L L@= HJG:9:ADALQ G> E=<A9 ;GN=JAF? L@= J=DA=> AK @A?@=J A> E=<A9
;GN=J=< L@= <AK9KL=J AFALA9DDQ '=L L@AK HJG:9:ADALQ :=
;4D@ ! 5 <99<DB=8;4D@ ;4D@ /@=F
;4D@ ;4D@ :=;9MK= G> L@= ;GJJ=D9LAGF :=LO==F 9F< $F GL@=J OGJ<K
9F E:9KK9<GJ G:K=JNAF? L@9L 9 <AK9KL=J AK ;GN=J=< :Q L@= E=<A9
J=9DAR=K L@9L L@AK E9C=K AL EGJ= DAC=DQ L@9L <AK9KL=J J=DA=> =ZGJLK 9J= 9DKG ;GN=J=<
#=F;=
L@= AF;=FLAN=K LG HJGNA<= J=DA=> 9J= KLJGF?=J
#! %" !$#" %" " ""#! Table 1: Summary Statistics for Disasters
Disaster type
Flood
Storm
Epidemic
Earthquake
Drought
Landslide
Fire
Cold wave
Volcano
Infestation
Food shortage
Total
67
Number of
disasters
1 675
1 175
737
559
326
310
129
114
102
47
38
5 212
Share of
disasters
0.32
0.23
0.14
0.11
0.06
0.06
0.02
0.02
0.02
0.01
0.01
1.00
Killed per
disaster
170
646
249
1 522
18 657
84
19
103
853
na
4 293
590
Affected per
disaster
1 724 851
601 490
27 528
173 015
5 740 623
38 789
69 552
46 656
39 008
1 100
734 630
1 166 505
Share receiving
OFDA relief
0.22
0.17
0.12
0.21
0.30
0.06
0.13
0.01
0.27
0.68
0.13
0.19
Chapter 2. News Droughts, News Floods and U.S. Disaster Relief
Table 2: Two largest daily news pressure dates and main story, by year
Year
Date
Main News Story
2003
14 Aug
22 Mar
New York City Blackout
Invasion of Iraq: Day 3
2002
11 Sep
24 Oct
9/11 Commemoration
Sniper Shooting in Washington: Arrest of Suspects
2001
13 Sep
12 Sep
9/11 Attack on America: Day 3
9/11 Attack on America: Day 2
2000
26 Nov
8 Dec
Gore vs. Bush: Florida Recount - Certification by Katherine Harris
Gore vs. Bush: Florida Recount - Supreme Court Ruling
1999
1 Apr
18 Jul
Kosovo Crisis: U.S. Soldiers Captured
Crash of Plane Carrying John F. Kennedy, Junior
1998
16 Dec
18 Dec
U.S. Missile Attack on Iraq
Clinton Impeachment
1997
23 Dec
31 Aug
Oklahoma City Bombing: Trial
Princess Diana’
s Death
1996
18 Jul
27 Jul
TWA Flight 800 Explosion
Olympic Games Bombing in Atlanta
1995
3 Oct
22 Apr
O.J. Simpson Trial: The Verdict
Oklahoma City Bombing
1994
17 Jan
18 Jun
California Earthquake
O.J. Simpson Arrested
1993
17 Jan
20 Apr
U.S. Missile Attack on Iraq
Waco, Texas: Cult Standoff Ends in Fire
1992
16 Jul
1 May
Perot Quits 1992 Presidential Campaign
Los Angeles Riots
1991
27 Feb
17 Jan
Gulf War: President Bush Declares Kuwait Liberated
Gulf War: Operation Desert Storm Launched
1990
4 Aug
8 Aug
Iraq Invasion of Kuwait: Day 4
Iraq Invasion of Kuwait: Mobilisation of U.S. Troops
1989
9 Mar
23 Dec
Senate Rejection of Tower Appointment to Secretary of Defense
Romania Revolution
1988
22 Dec
14 Dec
Pan Am Plane Crash
Arafat Condemns Terrorism and Accept Israel’
s Right to Exist
1987
26 Feb
18 May
Iran Arms Scandal: Tower Commission Report
USS Stark Attack in Persian Gulf
1986
29 Jan
15 Apr
Challenger Explosion
U.S. Attack on Libya
1985
30 Jun
29 Jun
TWA Flight 847 Hijacking: Release of Hostages
TWA Flight 847 Hijacking: Release of Hostages
1984
12 Jul
16 Aug
Ferraro as Vice President Candidate
Delorean Verdict
1983
25 Oct
3 Sep
U.S. Invasion of Grenada: Day 1
USSR Downing of Korean Commercial Flight
1982
4 Aug
2 Jan
Israel Invasion of Lebanon
Poland: Martial Law
1981
30 Mar
13 Dec
Ronald Reagan Assassination Attempt
Poland: Martial Law Declared by Wojchiech Jaruzelski
1980
10 Aug
26 Dec
Hurricane Allen in Texas
Iran Hostage Crisis: Iran Release Film of Hostages
39
#! %" !$#" %" " ""#! 1979
31 Mar
15 Dec
Three Mile Island Nuclear Accident
Iran Hostage Crisis: Departure of Shah from U.S. Announced
1978
19 Nov
6 Aug
Guyana Incident: Sect Mass Suicide
Death of Pope Paul VI
1977
14 Jul
11 Aug
New York City Blackout
Serial Killer David Berkowitz Arrested
1976
13 Jul
9 Jun
Democratic Convention
Jimmy Carter Wins in Primaries
1975
3 Nov
14 May
Nelson Rockefeller Decides Not to Run for Vice President
Mayaguez Incident: U.S. Attacks
1974
1 Mar
21 Jul
Watergate Indictments Announced
Turkey Invades Cyprus
1973
12 Feb
24 Jan
Vietnam War: U.S. Prisoners of War Released
Vietnam War: Cease-Fire Agreement Reached
1972
9 Jan
28 May
Howard Hughes Telephone Conference
Nixon Visit in USSR: SALT I signed
1971
16 Jul
16 Aug
Nixon Announces Trip to China
Nixon Suspends Convertibility from Dollars to Gold
1970
28 Sep
7 Sep
Gamal Abdel Nasser Dead
Dawson’s Field Hijackings: Blow Up of Planes
1969
15 Oct
28 Mar
Vietnam Anti-War Demonstration (Moratorium)
Eisenhower Dead
1968
22 Aug
1 Nov
USSR Invades Czechoslovakia: Day 2
October Surprise: Vietnam Bombing Halt
Note: Ordered by daily newspressure
Table 3. Summary statistics
Variable
relief
news
killed
affected
news pressure
Olympics
US ally
Observations
5 212
5 212
3 714
4 004
5 212
5 212
5 212
Mean
0.19
0.12
590
1 092 508
7.73
0.02
0.32
Std. Dev.
0.39
0.32
9 143
9 858 292
1.22
0.09
0.47
Min
0
0
1
1
4.56
0
0
Max
1
1
300 000
300 000 000
14.32
0.77
1
Dependent variable: Relief
IV
V
VI
-0.0119
-0.0094
-0.0078
(0.0045)***
(0.0058)
(0.0040)**
-0.1232
-0.1071
-0.1098
(0.0521)**
(0.0763)
(0.0479)**
0.0582
(0.0044)***
0.0376
(0.0024)***
0.0442
(0.0037)***
0.0394
(0.0020)***
Observations
5212
2926
5212
5212
2926
5212
R-squared
0.1791
0.3625
0.2861
0.1989
0.4115
0.3726
Linear probability OLS regressions. All regressions include year, month, country and disaster type fixed effects. Regressions
with imputed values (III and VI) also include fixed effects for the interaction of missing values and disaster type. Robust
standard errors in parentheses:* significant at 10%; ** significant at 5%; *** significant at 1%.
imputed Log Affected
imputed Log Killed
log Affected
log Killed
Olympics
News Pressure
Dependent variable: News
I
II
III
-0.0163
-0.0172
-0.0143
(0.0041)***
(0.0056)***
(0.0037)***
-0.1080
-0.0849
-0.1111
(0.0470)**
(0.0628)
(0.0413)***
0.0604
(0.0040)***
0.0121
(0.0024)***
0.0495
(0.0034)***
0.0148
(0.0020)***
Table 4: Effect of the pressure for news time on disaster News and Relief
#! %" !$#" %" " ""#! News Pressure
log Killed
log Affected
-0.0182
-0.0065
(0.0258)
(0.0438)
Olympics
-0.0209
-0.4569
(0.3263)
(0.5897)
p-value: F-test of joint insignificance
0.78
0.73
Observations
3714
4004
R-squared
0.2615
0.3571
OLS regressions including year, month, country and disaster type fixed effects. Robust
standard errors in parentheses:* significant at 10%; ** significant at 5%; *** significant at 1%.
Table 5. Correlations between instruments and the severity of disasters
#! %" !$#" %" " ""#! I
0.2859
(0.0200)***
0.0489
(0.0046)***
0.0359
(0.0024)***
II
0.1529
(0.0232)***
0.0378
(0.0038)***
0.0376
(0.0020)***
OLS
III
0.1293
(0.0178)***
0.0549
(0.0050)***
0.0444
(0.0023)***
0.2288
(0.0329)***
-0.4819
(0.1062)***
0.5378
(0.0942)***
IV
Observations
5212
2926
5212
5212
R-squared
0.2435
0.4217
0.3798
0.3857
All regressions include year, month, country, and disaster type fixed effects. Regressions with imputed
values (III and VI) also include fixed effects for the interaction of missing values and disaster type.
Robust standard errors in parentheses:
* significant at 10%; ** significant at 5%; *** significant at 1%.
F-stat, instruments, 1st stage
Over-id restrictions, χ2df (p-value)
imputed log Affected
imputed log Killed
log Affected
log Killed
abs(Pr(news)-0.5)
News*abs(Pr(news)-0.5)
News
Table 6. Dependent variable: Relief
5027
0.0308
(0.0046)***
0.0344
(0.0026)***
0.2549
(0.0567)***
-0.2921
(0.0851)***
0.2945
(0.0834)***
V
5.8
2926
11.1
0.0187
(0.0216)
0.0297
(0.0050)***
IV
VII
0.6543
(0.3478)*
0.511(0.47)
5212
VI
0.8228
(0.2526)***
0.641 (0.42)
5212
11.2
0.0107
(0.0132)
0.0295
(0.0044)***
VIII
0.6746
(0.2544)***
#! %" !$#" %" " ""#! -0.0085
(0.0041)**
-0.1290
(0.0521)**
5212
0.1985
-0.0082
(0.0040)**
-0.1182
(0.0515)**
5212
0.3851
-0.0126
(0.0054)**
-0.1338
(0.0583)**
3950
0.1835
-0.0193
(0.0052)***
-0.1008
(0.0572)*
3950
0.1862
8.6
-0.0125
(0.0142)
-0.1767
(0.0893)**
3473
0.2271
-0.0242
(0.0118)**
-0.1320
(0.0864)
3473
0.2072
3.4
Subsamples
VII
VIII
IV-regressions. Dependent variable: Relief
News
0.8228
0.8351
0.9391
0.8012
0.6726
0.7124
0.7561
0.8505
(0.2524)*** (0.2595)*** (0.3225)*** (0.2561)*** (0.2341)*** (0.2637)***
(0.2581)*** (0.4597)*
Observations
5212
5212
5212
5212
5212
5212
3910
3446
Over-id test
0.511(0.47) 0.471 (0.49) 0.201 (0.66) 0.611 (0.43) 1.271 (0.26) 0.751 (0.39) 1.101 (0.30) 0.851 (0.36)
Robust standard errors in parentheses. * significant at 10%; ** significant at 5%; *** significant at 1%. All regressions
include year, month, country and
disaster-type fixed-effects. Column I reports the results from an OLS regression. In Column II all days with news about
disasters have been removed before
computing the average news pressure. In Column III an extreme bias has been intentionally induced in news pressure. In
Column IV news pressure is the 20day average of daily news pressure, and in Column V it is the average using the weights reported in Figure 2. The regression
in Column VI contains controls
for whether the country was a US Ally, imputed log Killed and imputed log Affected, dummy variables for the interaction of
disaster type and missing data,
as well as two sets of dummy variables indicating whether Killed and Affected lie in the percentile regions 0th-25th, 25th-50th,
50th -75th, 75th-95th percentiles
respectively (omitted category is killed above 95th percentile). Column VII contains a sub sample with only earthquakes,
floods, fires landslides, storms and volcano
eruptions. Column VIII excludes observations where News Pressure was in the highest third each year.
-0.0092
(0.0038)**
-0.1266
(0.0521)**
5212
0.1987
Reduced form regressions. Dependent variable: Relief
News Pressure
-0.0119
-0.0116
-0.0104
(0.0045)*** (0.0045)*** (0.0046)**
Olympics
-0.1232
-0.1235
-0.1250
(0.0521)**
(0.0521)** (0.0520)**
Observations
5212
5212
5212
R-squared
0.1989
0.1989
0.1986
VI
-0.0155
-0.0143
(0.0036)*** (0.0038)***
-0.1156
-0.1090
(0.0470)** (0.0460)**
5212
5212
0.1795
0.2969
12.3
10.0
Changes in independent variables
III
IV
V
-0.0133
(0.0033)***
-0.1125
(0.0470)**
5212
0.1789
11.19
II
Reduced form regressions. Dependent variable: News
News Pressure
-0.0163
-0.0157
-0.0124
(0.0041)*** (0.0040)*** (0.0042)***
Olympics
-0.1080
-0.1085
-0.1114
(0.0470)**
(0.0469)** (0.0470)**
Observations
5212
5212
5212
R-squared
0.1791
0.1789
0.1779
F-test (instr.)
11.1
10.5
7.4
Table 7. Robustness
Reference
I
0.9454
(0.0406)***
5209
-0.0135
(0.0051)***
-0.1426
(0.0705)**
5209
-0.0174
(0.0048)***
-0.1048
(0.0547)*
4266
Probit
IX
#! %" !$#" %" " ""#! Share in
Fixed
Equal coverage
news
(se)
effects
(se)
casualties ratio*
Volcano
0.29
(0.05)
0.64
(0.09)
1
Earthquake
0.32
(0.02)
0.57
(**)
3
Fire
0.14
(0.03)
0.49
(0.09)
12
Storm
0.14
(0.01)
0.29
(0.03)
336
Flood
0.09
(0.01)
0.23
(0.02)
806
Landslide
0.06
(0.01)
0.20
(0.03)
1 379
Epidemic
0.02
(0.01)
0.18
(0.03)
2 006
Drought
0.03
(0.01)
0.16
(0.07)
2 563
Cold wave
0.06
(0.02)
0.15
(0.07)
3 056
Food shortage
0.03
(0.03)
0.00
(0.10)
39 817
The fixed effects regression includes log Killed, log Affected, and country, year and month fixed
effects.
*To have the same estimated probability of being covered by the Television Network News, a food
shortage
must have 39 817 times as many casualties as a volcano, all else equal (country, year, month, and
number affected).
** Earthquake is the omitted category.
Table 8. Newsworthiness of Disasters, by Disaster Type
#! %" !$#" %" " ""#! Share in
Fixed
Equal coverage
news
(se)
effects
(se)
casualties ratio*
Europe
0.18
(0.02)
0.25
(**)
1
S. and C. America
0.18
(0.01)
0.18
(0.04)
3
Asia
0.12
(0.01)
0.04
(0.03)
43
Africa
0.03
(0.01)
0.03
(0.04)
46
Pacific
0.03
(0.01)
0.00
(0.04)
84
The fixed effects regression includes log Killed, log Affected, and disaster type, year and month fixed
effects.
*To have the same estimated probability of being covered by the Television Network News, a disaster
in the
Pacific must have 84 times as many casualties as one in Europe, all else equal (disaster type, year,
month, and number affected).
** Europe is the omitted continent.
Table 9. Newsworthiness of Disasters, by Continents
#! %" !$#" %" " ""#! Share in
Fixed
Equal coverage
news
(se)
effects
(se)
casualties ratio*
1968-1972
0.14
(0.02)
-0.17
(0.03)
16
1973-1977
0.13
(0.02)
-0.10
(0.03)
5
1978-1982
0.12
(0.02)
-0.14
(0.02)
10
1983-1987
0.06
(0.02)
-0.16
(0.02)
13
1988-1992
0.10
(0.01)
-0.10
(0.02)
5
1993-1997
0.11
(0.01)
-0.10
(0.02)
4
1998-2002
0.13
(0.01)
0.00
(**)
1
The fixed effects regression includes log Killed, log Affected, and disaster type, country and month
fixed effects.
*To have the same estimated probability of being covered by the Television Network News, a disaster
in the
1968 must have 16 times as many casualties as one in 2002, all else equal (disaster type, country,
month, and number affected).
** 1998-2002 is the omitted period.
Table 10. Newsworthiness of Disasters, by Five-Year period
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100
Labor Force Participation Rate (%)
90
US 55-64
80
70
60
50
UK
Germany
France
40
US 65+
30
20
10
0
1850
1900
1950
2000
Year
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#! " & #!# # %## #$!&
0.9
Ages 75-79
0.8
Retirement Rate (%)
0.7
Ages 70-74
0.6
0.5
Ages 65-69
Ages 60-64
0.4
0.3
Ages 55-59
0.2
Ages 50-54
0.1
0
1850
1900
1950
2000
Year
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80
78
76
Median Retirement Age
Age
74
72
70
Gendell - Social security
68
Blöndal and Scarpetta
66
Gendell - Median
64
62
1900
1910
1920
1930
1940
1950
1960
1970
1980
1990
2000
Year
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Expected Percentage of Life Spent in Retirement
30
25
20
15
10
5
1850
1900
1950
2000
Year
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Productivity profile
1,4
1,2
1
0,8
0,6
0,4
0,2
French (2005)
80
78
76
74
72
70
68
66
64
62
60
58
56
54
52
50
48
46
44
42
40
38
36
34
32
30
28
26
24
22
20
0
CPS (1999)
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+
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'/
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9 J=LAJ=E=FL 9?= G> O@AD= AF L@= =;GFGEQ L@= J=LAJ=E=FL 9?= <=;DAF=K LG
0HGF AFLJG<M;AF? KG;A9D K=;MJALQ AF L@= =;GFGEQ
L@= J=LAJ=E=FL 9?= <JGHK
K@9JHDQ LG >L=J L@= =9JDQ =DA?A:ADALQ 9?= AK J=<M;=< LG >JGE 9F< GFO9J<
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2@9L ;9F 9;;GMFL >GJ L@= LJ=F<K AF J=LAJ=E=FL 9;;GJ<AF? LG L@= EG<=D !JGE
L@= NA=OHGAFL G> L@= AF<ANA<M9D
KAP G:B=;LK ;@9F?= :=LO==F L@= KL=9<Q KL9L=K L@=
AFL=J=KL J9L=
L@= O9?= J9L=
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L@= KMJNAN9D HJG:9:ADALA=K 9F< L@=
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9L L@= HJA;=K
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#! " & #!# # %## #$!&
80
78
U.S. Median Retirement Age
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
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(G<=D 9F< 9L9
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L@= GHLAE9D J=LAJ=E=FL 9?= >JGE LG *F L@= GL@=J @9F<
L@= AF;J=9K= AF
L@= ?=F=J9D L9P J9L= >JGE LG $&4&2*3 0"2*#53 <=D9QK J=LAJ=E=FL :Q SN=
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J9L= HJGNA<=< AF;=FLAN=K LG J=LAJ= =9JDA=J
L@AK O9K ;GMFL=J9;L=< :Q L@= AF;J=9K= AF
AFL=J=KL J9L=K 9F< KMJNAN9D J9L=K
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-348.5
Approximation
-349
Utility
Value function
at integer ages
-349.5
-350
-350.5
-351
41
42
43
44
45
Model Age
46
47
48
49
!A?MJ= 19DM= >MF;LAGF 9L <AZ=J=FL J=LAJ=E=FL 9?=K
-=9D ?= (G<=D ?=
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? $
D
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,,
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L@= LO=FLA=L@ ;=FLMJQ !A?MJ= <=HA;LK HJGSD=K G> DA>= ;Q;D= @GMJK OGJC=< >GJ L@=
<AZ=J=FL KL=9<Q KL9L=K K L@= ;=FLMJQ H9KK=K
L@= HJGSD= G> DA>= ;Q;D= D9:GJ KMHHDQ
K@A>LK ;DG;COAK= K H=GHD= =FL=J =9JDA=J AFLG J=LAJ=E=FL
L@=Q 9DKG L=F< LG OGJC
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0.4
1900
1930
1950
1960
1970
1980
1990
2000
0.35
Hours Worked (Weekly)
0.3
0.25
0.2
0.15
0.1
0.05
0
20
30
40
50
Age
60
70
80
!A?MJ= 2==CDQ #GMJK 2GJC=<
HJAE=9?= LG GD< 9?=
9F< LG AF;J=9K=K AF L9P=K GF D9:GJ O@A;@ <JAN= MH L@= @GMJK
OGJC=<
$L AK AFL=J=KLAF? LG ;GEH9J= L@AK S?MJ= OAL@ L@= HJGSD=K G> @GMJK OGJC=< ;GF
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-G?=JKKGF ;GFKLJM;L HJGSD=K G> @GMJK OGJC=< >GJ ;G@GJLK :GJF LG AF L@=
0FAL=< .L9L=K /@= H9LL=JF G> D9:GJ KMHHDQ K@A>LK ;DG;COAK= 9K AF L@= EG<=D ,M9F
LAL9LAN=DQ
L@= EG<=D 9HH=9JK LG := ;GFKAKL=FL OAL@ L@= J=<M;LAGF AF @GMJK OGJC=<
9EGF? L@= =D<=JDQ /@= EG<=D ;9F GFDQ 9;;GMFL >GJ L@= JAK= AF @GMJK OGJC=< 9EGF?
OGJC=JK LG 9 DAEAL=< =PL=FL
#42+ **/9/43'1 "+8:198
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=JK AF L@= H9KL ;=FLMJQ /@AK K=;LAGF HJ=K=FLK KGE= 9<<ALAGF9D J=KMDLK !AJKL
L@=
=;GFGEA=K ;GFKA<=J=< AF L@= HJ=NAGMK K=;LAGF O=J= KL=9<Q KL9L= =;GFGEA=K *:NA
GMKDQ
AL AK 9 KLJ=L;@ LG 9J?M= L@9L L@= 0. =;GFGEQ O9K AF 9 KL=9<Q KL9L= 9L 9FQ G>
L@=K= HGAFLK AF LAE= /@=J=>GJ=
9 LJ9FKALAGF9D 9F9DQKAK AK ;9JJA=< GML /@= =;GFGEQ
AK 9KKME=< LG KL9JL GML AF 9 KL=9<Q KL9L= AF OAL@GML 9 ?GN=JFE=FL /@=F
AF
F=O HGDA;A=K 9F< KMJNAN9D J9L=K 9J= MF9FLA;AH9L=<DQ 9FFGMF;=< $L AK 9KKME=<
F =PLJ9HGD9LAGF HJG;=<MJ= AK MK=< >GJ ;G@GJLK >GJ O@A;@ <9L9 AK EAKKAF?
#! " & #!# # %## #$!&
Hours worked, US Total Population
McGrattan and Rogerson (2004)
40
35
30
1866-75
1876-85
1886-95
1896-1905
1906-15
1916-25
1926-35
1936-45
1946-55
1956-65
1966-75
1976-85
25
20
15
10
5
0
15-24
25-34
35-44
45-54
55-64
65-74
75-99
!A?MJ= #GMJK 2GJC=< :Q G@GJL 9F< ?=
0. +GHMD9LAGF
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L@= <=:LJ9LAG
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9FLA;AH9L= 9DD ;@9F?=K AF HJA;=K 9F< HGDA;A=K
/@= J=KMDLK >GJ L@= J=LAJ=E=FL 9?=K 9J= HJ=K=FL=< AF S?MJ= LG?=L@=J OAL@
L@= :9K=DAF= 2= K== L@9L L@= J=LAJ=E=FL 9?= >GDDGOK 9 KGE=O@9L DGO=J LJ9B=;LGJQ
;GEH9J=< LG L@= 9K=DAF= EG<=D /@= J=9KGF AK
L@9L AF<ANA<M9DK J=9DAR= L@9L AFL=J=KL
J9L=K OADD JAK= 9F< L@9L KG;A9D K=;MJALQ :=F=SLK OADD := 9N9AD9:D= 9F< 9<BMKLK L@=AJ
;GFKMEHLAGF HD9FK 9;;GJ<AF?DQ 0HGF L@= AFLJG<M;LAGF G> KG;A9D K=;MJALQ
L@=J= AK
GF;= EGJ= 9 <AK;J=L= BMEH AF L@= J=LAJ=E=FL 9?=
:ML D=KK KG :=;9MK= AF<ANA<M9DK
@9N= 9FLA;AH9L=< L@= J=>GJE
/@= EG<=D <A< FGL <G O=DD AF E9L;@AF? L@= J=LAJ=E=FL 9?= >GJ L@= Q=9J /@= EG<=D
9K ;GFKLJM;L=<
9:KLJ9;LK >JGE 9F AEHGJL9FL LJ9FK>=J HJG?J9E
F9E=DQ
E=<A;9J= (=<A;9J= ;GFKLALML=K GF= G> L@= KAF?D= EGKL AEHGJL9FL LJ9FK>=J HJG?J9EK
AF GD< 9?= .LGJ=KD=LL=F =KLAE9L=K E=<A;9J= LJ9FK>=JK 9K 9 K@9J= G> ")+ H=J
;9HAL9
:Q 9?= K== !A?MJ= /@AK HJGSD= ;9F @9N= AEHGJL9FL AEHDA;9LAGFK >GJ
K9NAF?K :=@9NAGJ
LG L@= =PL=FL L@9L AF<ANA<M9DK ;GFKA<=J AL 9 KM:KLALML= >GJ K9NAF?K
$F H9JLA;MD9J
AFLJG<M;AF? E=<A;9J= AFLG L@= =;GFGEQ @=DHK MK LG ;J=9L= 9 D9J?=J ?9H
AF AFL=J=KL J9L=K :=LO==F L@= AFALA9D Q=9J 9F< L@= SF9D Q=9J G> L@= =;GFGEQ .AF;=
/@= FME:=JK 9J= FGL <AJ=;LDQ ;GEH9J9:D=
KAF;= L@=J= 9J= ;G@GJL 9F< LAE= =Z=;LK AF L@= LJ9F
KALAGF9D 9F9DQKAK /@= ?J9H@ >GJ L@= LJ9FKALAGF <AKHD9QK L@= J=LAJ=E=FL 9?= G> L@= ;G@GJL LMJFAF? AF L@= ?AN=F Q=9J
#! " & #!# # %## #$!&
Lump Sum Transfer Function
0.35
0.3
Share of GNP/capita
0.25
0.2
0.15
0.1
0.05
0
0
20
40
60
Age
80
100
120
!A?MJ= (=<A;9J= /J9FK>=J :Q ?=
.@9J= G> ")+ H=J 9HAL9
AFL=J=KL J9L=K AK 9F AEHGJL9FL <=L=JEAF9FL G> L@= J=LAJ=E=FL 9?=
L@AK E9Q ?AN= MK
KGE= D==O9Q AF L=JEK G> L@= J=LAJ=E=FL 9?= /@=J=>GJ=
L@= >GDDGOAF? =PH=JAE=FL
O9K ;GF<M;L=< /@= =;GFGEQ O9K J=;9DA:J9L=< LG L@= Q=9J 9<<AF? E=<A;9J=
AFLG L@= ?GN=JFE=FLVK LJ9FK>=J HJG?J9E (=<A;9J= AK 9KKME=< LG := HJGNA<=< DMEH
KME 9;;GJ<AF? LG L@= >MF;LAGF =KLAE9L=< :Q .LGJ=KD=LL=F !A?MJ= HJ=K=FLK
L@= J=KMDLK >GJ L@= J=LAJ=E=FL 9?= OAL@ E=<A;9J= $F<ANA<M9DK FGO J=LAJ= EM;@ D9L=J
AFALA9DDQ
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78
76
74
Age
72
70
General Equilibrium
68
66
Partial Equilibrium
64
62
0
0.1
0.2
0.3
0.4
Replacement Rate
0.5
0.6
0.7
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10
Large-company Stocks
Long-term Municipal Bonds
9
8
7
6
5
4
3
2
1
0
1880
1890
1900
1910
1920
1930
1940
1950
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Life Expectancy at Birth
Total Fertility Rate
(Births per 1,000 Women 15-44 years old)
90
Data
Projection
120
80
Years
Total Fertility Rate
140
100
2000
2050
Year
2100
50
1900
2150
1940
1960
1980
Year of Birth
2000
2020
Data
Projection
3
2
1
1940 1960 1980 2000 2020 2040 2060 2080 2100 2120
Year
Population Growth Rate
2
5
Net Immigration Rate
1920
Population Growth Rate
Net Immigration Rate
(Per 1,000 in U.S. Population)
4
High-skilled
Medium-skilled
Low-skilled
60
80
60
1950
70
Data
Projection
1.5
1
0.5
1940 1960 1980 2000 2020 2040 2060 2080 2100 2120
Year
!A?MJ= =EG?J9H@A; /J9FKALAGF
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Dependency Ratio (65+/(20-64))
Dependency Ratio
0.5
0.4
0.3
0.2
Data
Projection
0.1
1940
1960
1980
2000
2020
2040
2060
2080
2100
2120
Year
Median Age among Workers
55
35
50
Median Age
Median Age
Median Age in Population
40
30
45
High-skilled
Medium-skilled
Low-skilled
Data
Projection
25
1950
2000
2050
Year
2100
2150
40
2000
2020
2040
2060
Year
2080
2100
2120
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#! $"# " & # #!# "
Productivity Profiles, by Age and Skill Group
2
High-skilled
Medium-skilled
Low-skilled
HS Mean
MS Mean
LS Mean
1.8
1.6
Productivity Units
1.4
1.2
1
0.8
0.6
0.4
0.2
0
20
30
40
50
60
Age
70
80
90
100
!A?MJ= +JG<M;LANALQ +JGSD=
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Labor Force Participation
90
Low-skilled
Medium-skilled
High-skilled
80
Labor Force Participation (%)
70
60
50
40
30
20
10
0
55
60
65
Age
70
75
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Lump Sum Transfer Function
0.35
0.3
Share of GNP/Capita
0.25
0.2
0.15
0.1
0.05
0
0
10
20
30
40
50
Age
60
70
80
90
100
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#! $"# " & # #!# "
Net Interest Rate
0.04
0.5
TR
RR
FR
0
-0.5
-1
2020
2040
2060
Year
2080
2100
Net Interest Rate
Debt to Output Ratio
Debt to Output Ratio
-1.5
2000
0.035
0.03
0.025
0.02
2000
2120
2020
2040
2100
2120
2020
2040
2100
2120
2020
2040
2100
2120
Wage Rate (2000=1)
1.15
1.1
1.05
Efficiency Hours/Capita
2020
2040
2060 2080 2100
Year
Efficiency Hours Per Capita (2000=1)
2120
Capital per Capita (2000=1)
Wage Rate
1.2
1
2000
2060 2080
Year
Capital Per Capita
1.5
1.25
1
2000
2060 2080
Year
Output per Capita
1.15
1
1.1
1.05
0.95
1
0.9
2000
2020
2040
2060
Year
2080
2100
2120
0.95
2000
2060
2080
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75
74
73
72
71
70
Age
69
68
67
66
65
64
High skilled
Medium skilled
Low skilled
63
62
61
-100
-80
-60
-40
-20
0
20
Age in 2000
40
60
80
100
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#! $"# " & # #!# "
70
69
Age
68
67
66
Steady State Prices and Survival
Steady State Survival
Steady State Prices
65
64
0
10
20
30
40
50
60
Age in 2000
70
80
90
100
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75
74
73
72
71
70
Age
69
68
67
66
65
64
High skilled
Medium skilled
Low skilled
63
62
61
-100
-80
-60
-40
-20
0
20
Age in 2000
40
60
80
100
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75
74
73
72
71
70
Age
69
68
67
66
65
64
High skilled
Medium skilled
Low skilled
63
62
61
-100
-80
-60
-40
-20
0
20
Age in 2000
40
60
80
100
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Effective Dependency Ratio
Retirees to Workers
0.4
Dependency Ratio
0.35
0.3
0.25
0.2
0.15
TR
RR
FR
0.1
2000
2020
!A?MJ= 2040
2060
Years
2080
2100
2120
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67
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9F< $> 9F< L@=F ;GFLAFM= *L@=JOAK= J=LMJF LG $> $ A L@=F ;GFLAFM= *L@=JOAK= J=LMJF LG .GDN= >GJ L@= GHLAE9D J=LAJ=E=FL 9?= ?AN=F 9F< =SF= . + B 2 + 7 + O@=J= 2 + 9F< 7 + <=FGL=K L@= GHLAE9D HGD
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-=LAJ=E=FL ?= J=>GJE
9 KAEAD9J HJG;=<MJ= AK MK=< #GO=N=J
9F 9<<ALAGF9D GML=J
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<=L=JEAF=< (GJ=GN=J
AF 9F =PLJ9 J=IMAJ=E=FL AK L@9L MONOGRAPH SERIES
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Nyberg, Lars and Staffan Viotti A Control Systems Approach to
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Myhrman, Johan Monetary Policy in Open Economies, 1975
Krauss, Melvyn International Trade and Economic Welfare, 1975
Wihlborg, Clas Capital Market Integration and Monetary Policy under
Different Exchange Rate Regimes, 1976
Svensson, Lars E.O. On Competitive Markets and Intertemporal Resources
Allocation, 1976
Yeats, Alexander J. Trade Barriers Facing Developing Countries, 1978
Calmfors, Lars Prices, Wages and Employment in the Open Economy, 1978
Kornai, János Economics of Shortage, Vols I and II, 1979
Flam, Harry Growth, Allocation and Trade in Sweden. An Empirical
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Persson, Torsten Studies of Alternative Exchange Rate Systems. An
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Erzan, Refik Turkey's Comparative Advantage, Production and Trade
Patterns in Manufactures. An Application of the Factor Proportions
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Horn af Rantzien, Henrik Imperfect Competition in Models of Wage
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Nandakumar, Parameswar Macroeconomic Effects of Supply Side Policies
and Disturbances in Open Economies, 1985
Sellin, Peter Asset Pricing and Portfolio Choice with International
Investment Barriers, 1990
Werner, Ingrid International Capital Markets: Controls, Taxes and
Resources Allocation, 1990
Svedberg, Peter Poverty and Undernutrition in Sub-Saharan Africa: Theory,
Evidence, Policy, 1991
Nordström, Håkan Studies in Trade Policy and Economic Growth, 1992
Hassler, John, Lundvik, Petter, Persson, Torsten and Söderlind, Paul The
Swedish Business Cycle: Stylized facts over 130 years, 1992
Lundvik, Petter Business Cycles and Growth, 1992
Söderlind, Paul Essays in Exchange Rates, Business Cycles and Growth, 1993
Hassler, John A.A. Effects of Variations in Risk on Demand and Measures of
Business Cycle Comovements, 1994
Daltung, Sonja Risk, Efficiency, and Regulation of Banks, 1994
Lindberg, Hans Exchange Rates: Target Zones, Interventions and Regime
Collapses, 1994
Stennek, Johan Essays on Information-Processing and Competition, 1994
Jonsson, Gunnar Institutions and Incentives in Monetary and Fiscal Policy, 1995
Dahlquist, Magnus Essays on the Term Structure of Interest Rates and
Monetary Policy, 1995
Svensson, Jakob Political Economy and Macroeconomics: On Foreign Aid
and Development, 1996
Blix, Mårten Rational Expectations and Regime Shifts in Macroeconometrics, 1997
Lagerlöf, Nils-Petter Intergenerational Transfers and Altruism, 1997
Klein, Paul Papers on the Macroeconomics of Fiscal Policy, 1997
Jonsson, Magnus Studies in Business Cycles, 1997
Persson, Lars Asset Ownership in Imperfectly Competitive Markets, 1998
Persson, Joakim Essays on Economic Growth, 1998
Domeij, David Essays on Optimal Taxation and Indeterminacy, 1998
Flodén, Martin Essays on Dynamic Macroeconomics, 1999
Tangerås, Thomas Essays in Economics and Politics: Regulation, Elections
and International Conflict, 2000
Lidbom, Per Pettersson Elections, Party Politics and Economic Policy, 2000
41. Vestin, David Essays on Monetary Policy, 2001
42. Olofsgård, Anders Essays on Interregional and International Political
Economics, 2001
43. Johansson, Åsa Essays on Macroeconomic Fluctuations and Nominal Wage
Rigidity, 2002
Groth, Charlotta Topics on Monetary Policy, 2002
Gancia, Gino A. Essays on Growth, Trade and Inequality, 2003
Harstad, Bård Organizing Cooperation: Bargaining, Voting and Control, 2003
Kohlscheen, Emanuel Essays on Debts and Constitutions, 2004
Olovsson, Conny Essays on Dynamic Macroeconomics, 2004
Stavlöt, Ulrika Essays on Culture and Trade, 2005
Herzing, Mathias Essays on Uncertainty and Escape in Trade Agreements, 2005
Bonfiglioli, Alessandra Essays on Financial Markets and Macroeconomics, 2005
Pienaar, Natalie Economic Applications of Product Quality Regulation in WTO
Trade Agreements, 2005
53. Song, Zheng Essays on Dynamic Political Economy, 2005
54. Eisensee, Thomas Essays on Public Finance: Retirement Behavior and Disaster
Relief, 2005
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