Consumption, Retirement, and Social Security: Evaluating the Efficiency of Reform with a Life-Cycle Model

This paper analyzes the effect of a potential reform to the Social Security system on individuals’ retirement and consumption choices. We first estimate the coefficients for a life-cycle model. We assume intratemporally nonseparable preference orderings and endogenous retirement. Our framework allows the possibility of disability. The specification predicts a change in consumption at retirement; we use the empirical magnitude of the change, together with desired retirement age, to identify key parameters such as the curvature of the utility function. We then qualitatively and quantitatively study the possible long-run effect of a Social Security reform in which individuals no longer face the OASI payroll tax after some specified age, and their subsequent earnings have no bearing on their Social Security benefits. Simulations indicate that retirement ages would rise by as much as one year, equivalent variations could average $5000 (1984 dollars) per household or more, and reform could generate$2500 or more additional income tax revenue per household.

Estimating Life—Cycle Parameters from Consumption Behavior at Retirement”

Using pseudo-panel data, we estimate the structural parameters of a life—cycle consumption model with discrete labor supply choice. A focus of our analysis is the abrupt drop in consumption upon retirement for a typical household. The literature sometimes refers to the drop, which in the U.S. Consumer Expenditure Survey we estimate to be approximately 16%, as the “retirement—consumption puzzle.” Although a downward step in consumption at retirement contradicts predictions from life—cycle models with additively separable consumption and leisure, or with continuous work-hour options, a consumption jump is consistent with a setup having nonseparable preferences over consumption and leisure and requiring discrete work choices. This paper specifies a life—cycle model with these latter two elements, and it uses the empirical magnitude of the drop in consumption at retirement to provide an advantageous method of identifying structural parameters–most importantly, the intertemporal elasticity of substitution.

Life-Cycle Models: Lifetime Earnings and the Timing of Retirement

After dropping for a century, the average retirement age for U.S. males seems to have leveled off in recent decades. An important question is whether as future improvements in technology cause wages to rise, desired retirement ages will resume their downward trend, or not. This paper attempts to use HRS panel data to test how relatively high (or low) earnings affect male retirement ages. Our goal is to use cross-sectional earning differences to help anticipate likely time-series developments in coming decades. Our preliminary regression results show that higher earnings do lead to somewhat earlier retirement. Unless additional analysis changes the parameter estimates, the implication is that the downward trend in male retirement ages will ultimately return.

Do Anomalous Narrow Line Quasars Cast Doubt on Virial Mass Estimation?

Anomalous Narrow-Line Quasars (ANLs) are a population of quasars with narrow H\beta, and sometimes [O III] broader than ~1000 km/s, in total comprising \sim 10-30% (most likely ~25%) of Type I quasars at 0.2 < z < 0.8. We find that virial masses using the H\beta and Mg II lines systematically differ for ANLs by an average of as much as 0.5 dex. Because the broad H\beta component width increases in ANLs but Mg II does not, we might suspect H\beta-based virial masses for ANLs are wrong but Mg II masses are correct. If this is due to an outflow reaching the lower-ionization potential H\beta line, C IV masses will be similarly flawed. However, we cannot be certain of this explanation without followup work, and may be unable to identify which quasars are ANLs at z > 0.8. Therefore, it is essential that ANLs be well-understood and well-modeled in order to allow the use of virial mass estimators on large optical spectroscopic catalogs, particularly at z 2.0 where only one broad line is available for use in mass estimation.Comment: 5 pages, submitte

Star formation in galaxies hosting Active Galactic Nuclei up to z~1

We review recent evidence for a clear association between accretion onto supermassive black holes and star formation up to z~1 in the zCOSMOS survey. Star formation rates (SFRs) are determined from the [OII] emission-line strength and a correction for the AGN contribution. We find that SFRs of X-ray selected AGN span a distribution of 1-100 solar masses per year and evolve in a manner that is indistinguishable from that of massive, star-forming galaxies. The close relationship between AGN activity and star formation is further supported by an increase in the AGN fraction with bluer rest-frame colors (U-V); we further illustrate how the location of AGNs in a color-magnitude diagram can be misleading in luminosity-limited samples due to the dependence of AGN activity on the stellar mass and the low mass-to-light ratios of blue cloud galaxies. To conclude, our results support a co-evolutionary scenario up to z~1 based on the constancy with redshift of the ratio between mass accretion rate and SFR.Comment: Invited talk, to appear in the Proceedings of "AGN Feedback in Galaxy Formation", V.Antonuccio-Delogu and J. Silk, eds., in pres

How Does the Government (Want to) Fund Science? Politics, Lobbying and Academic Earmarks

This paper examines academic earmarks and their role in the funding of university research. It provides a summary and review of the evidence on the supply of earmarks by legislators. It then discusses the role of university lobbying for earmarks on the demand side. Finally, the paper examines the impact of earmarks on research quantity and quality.

Academic Earmarks and the Returns to Lobbying

Despite a large literature on lobbying and information transmission by interest groups, no prior study has measured returns to lobbying. In this paper, we statistically estimate the returns to lobbying by universities for educational earmarks (which now represent 10 percent of federal funding of university research). The returns to lobbying approximate zero for universities not represented by a member of the Senate Appropriations Committee (SAC) or House Appropriations Committee (HAC). However, the average lobbying university with representation on the SAC receives an average return to one dollar of lobbying of $11-$17; lobbying universities with representation on the HAC obtain $20-$36 for each dollar spent. Moreover, we cannot reject the hypothesis that lobbying universities with SAC or HAC representation set the marginal benefit of lobbying equal to its marginal cost, although the large majority of universities with representation on the HAC and SAC do not lobby, and thus do not take advantage of their representation in Congress. On average, 45 percent of universities are predicted to choose the optimal level of lobbying. In addition to addressing questions about the federal funding of university research, we also discuss the impact of our results for the structure of government.

Fetal heterotaxy with tricuspid atresia, pulmonary atresia, and isomerism of the right atrial appendages at 22 weeks.

We report the accurate prenatal diagnosis at 22 weeks gestation of right atrial isomerism in association with tricuspid atresia. Several distinctive sonographic features of isomerism of the right atrial appendages were present in this fetus: complex cardiac abnormality, ventriculoarterial discordance, juxtaposition of the aorta and the inferior vena cava to the right side, pulmonary atresia, and anomalous pulmonary venous return to the morphological right atrium. Tricuspid atresia, which is an extremely rare lesion within heterotaxy spectrum disorders, was present. Postnatal investigations confirmed all prenatally diagnosed abnormalities, with additional findings of pulmonary atresia with discontinuous pulmonary arteries and bilateral arterial ducts, asplenia, and bilateral eparterial bronchi. To our knowledge, tricuspid atresia in the setting of isomerism of the right atrial appendages has not previously been diagnosed or reported prenatally. Because of the complexity of cardiac lesions that may be present in cases of atrial isomerism, these disorders should be considered even if sonographic findings are uncommon or atypical