Jochen O. Mierau

TERRORISM AND CABINET DURATION

Terrorism can strengthen or weaken electoral support for ruling governments. We show in a simple model of coalition formation that, regardless of the direction of a public opinion shock, the impact of terrorism on cabinet duration is ambiguous. However, in an analysis of a data set including 2,400 cabinets in over 150 countries in the period 1970–2002, we find that terrorism, on average, shortens cabinet duration. This result is robust for a range of alternative terror measures and is present in both democratic as well as autocratic political regimes.

GROWTH EFFECTS OF CONSUMPTION AND LABOR-INCOME TAXATION IN AN OVERLAPPING-GENERATIONS LIFE-CYCLE MODEL

We study labour-income and consumption taxation in an overlapping-generations model featuring endogenous growth due to inter-firm investment externalities. Consumption, saving, and labour supply display life-cycle features because mortality and labour productivity are age dependent and because annuity markets may be imperfect. The government’s method of revenue recycling critically affects the growth consequences of taxation. Purely consumptive government spending has a negative impact on growth. Redistribution of tax revenue from dissavers to savers may lead to an increase in growth due to beneficial intergenerational transfer effects.

A TRAGEDY OF ANNUITIZATION? LONGEVITY INSURANCE IN GENERAL EQUILIBRIUM

We construct a tractable discrete-time overlapping generations model of a closed economy and use it to study government redistribution of accidental bequests and private annuities in general equilibrium. Individuals face longevity risk as there is a positive probability of passing away before the retirement period. We find non-pathological cases where it is better for long-run welfare to waste accidental bequests than to give them to the elderly. Next we study the introduction of a perfectly competitive life insurance market offering actuarially fair annuities. There exists a tragedy of annuitization: although full annuitization of assets is privately optimal it is not socially beneficial due to adverse general equilibrium repercussions.

Born at the right time? Childhood health and the business cycle

We analyze the relationship between the state of the business cycle at birth and childhood health. We use a retrospective survey on self-reported childhood health for ten Western European countries and combine it with historically and internationally comparable data on the Gross Domestic Product. We validate the self-reported data by comparing them to realized illness spells. We find a positive relationship between being born in a recession and childhood health. This relationship is not driven by selection effects due to heightened infant mortality during recessions. Placebo regressions indicate that the observed effect is not spurious.

Leadership Matters: The Effects of Targeted Killings on Militant Group Tactics

ABSTRACT Targeted killings have become a central component of counterterrorism strategy. In response to the unprecedented prevalence of this strategy around the world, numerous empirical studies have recently examined whether “decapitating” militant groups with targeted killings is strategically effective. This study builds on that research program by examining the impact of targeted killings on militant group tactical decision-making. Our empirical strategy exploits variation in the attack patterns of militant groups conditional on whether a government’s targeted killing attempt succeeded against them operationally. In both the Afghanistan-Pakistan and Israel-West Bank-Gaza Strip theaters, targeted killings significantly alter the nature of militant group violence. When their leaderships are degraded with a successful strike, militant groups become far less discriminate in their target selection by redirecting their violence from military to civilian targets. We then analyze several potential causal mechanisms to account for these results and find strongest evidence that targeted killings tend to promote indiscriminate organizational violence by empowering lower level members with weaker civilian restraint.

Associations between Childhood Parental Mental Health Difficulties and Depressive Symptoms in Late Adulthood: The Influence of Life-Course Socioeconomic, Health and Lifestyle Factors

Background Depression among older adults (i.e., the 50+) is a major health concern. The objective of this study is to investigate whether growing up with a parent suffering from mental health problems is associated with depressive symptoms in late-adulthood and how this association is influenced by life-course socio-economic, health and lifestyle factors in childhood and late adulthood. Methods We used life-history data from the SHARE survey, consisting of 21,127 participants living in 13 European countries. Symptoms of depression were assessed using the EURO-D scale. Parental mental health was assessed by asking respondents to report whether any of their parents had mental health problems during the respondents’ childhood. Logistic regression models were used to assess the association between parental mental health status and depression. Variables on childhood and late-life socio-economic, health and lifestyle factors were sequentially added to the model to assess the extent to which this association is influenced by life-course circumstances. Results Individuals who were exposed during childhood to a parent with mental health problems suffered from depressive symptoms more often in late adulthood than those who were not (OR 1.76, 95% CI: 1.43–2.17). Adjustment for life-course socio-economic, health and lifestyle factors in childhood and late adulthood diminished this association to an OR of 1.54 (95% CI: 1.24–1.90) and OR of 1.45 (95% CI: 1.16–1.82), respectively. Conclusion Our results indicate a substantial association between parental mental health problems in childhood and depression in late adulthood and that this association is partly explained by childhood as well as late adulthood socio-economic, health and lifestyle factors.

Non-Annuitization in the Annuity Market

Non-annuitization in the annuity market

The activity and lethality of militant groups: Ideology, capacity, and environment

What determines the activity and lethality of militant groups? To answer this question, a two-step count method disentangles activity and lethality in terms of ideology, capacity, and environmental factors. A first step assesses the correlates of group activity, measured by the number of incidents in which a group was involved. The second step considers the number of fatalities, conditional on the number of incidents. Similar factors drive militant group activity and lethality, but some links are stronger than others. Specifically, ideological factors are particularly strong determinants of lethality; capacity and environmental factors matter more for activity.

Fertility and Mortality in a Neoclassical Growth Model

We develop and study a neoclassical growth model with a realistic demographic structure. Our model complements recent developments in the overlapping generations (OLG) literature by highlighting the natural link that exists between different classes of macrodynamic models. Within the model we show that there exists an overlooked equilibrium in which demographic factors play a minor role. In numerical simulations we show that the economic impact of a change in the population growth rate differs dramatically depending on whether the change was induced by a change in the birth rate, the mortality rate or a combination of the two. Finally, we show that the demographic transition experienced by the US over the last half century cannot explain the substantial aggregate economic changes that have occurred during this period.

Childhood Socioeconomic Status and Late-Adulthood Mental Health: Results from the Survey on Health, Ageing and Retirement in Europe.

Objectives A growing literature acknowledges the association between childhood socioeconomic status (SES) and health in late adulthood (i.e., 50+). Less, however, is known about the association with mental health outcomes, such as depression. We use the Survey on Health, Ageing, and Retirement in Europe (SHARE) to analyze overall and gender-specific associations between childhood SES and late-adulthood depression. Methods Using life history and contemporaneous data from 21,989 SHARE respondents in combination with principal component analysis we construct indices of childhood SES. We measure late-adulthood depression using the EURO-D scale. Contemporaneous SES is operationalized as the logarithm of household equivalized income. We estimate associations using linear regression models. Results We document a positive association between childhood SES and the late-adulthood EURO-D score. The association persists even when allowing for contemporaneous SES. Zooming in on gender-specific associations reveals that the association for mental health is particularly pronounced for women. Discussion Our findings reveal the long-term association between childhood socioeconomic conditions and depression later in life, which persists even after taking into account current socioeconomic conditions and are stronger for women than for men. These results imply that boosting childhood socioeconomic conditions can potentially have effects lasting well beyond the childhood phase.