Long-Run Consequences of Natural Disasters: Evidence from Tangshan

Exploiting Tangshan 1976 - the deadliest earthquake in the 20th century - as a source of exogenous variation, we estimate the cohort-specific effects of a historical shock on contemporary socio-economic outcomes. While cohorts born after the earthquake were considerably larger, the adverse post-disaster conditions did not translate into lasting impacts on schooling and labour market outcomes. Cohorts at schooling age during the earthquake, however, exhibit considerably lower education levels today, particularly among the female. Despite lower education, there is no evidence for adverse labour market outcomes. We conduct extensive robustness checks and argue that the effect is causal

Estimating Standard Errors in Finance Panel Data Sets: Comparing Approaches

In corporate finance and asset pricing empirical work, researchers are often confronted with panel data. In these data sets, the residuals may be correlated across firms or across time, and OLS standard errors can be biased. Historically, researchers in the two literatures have used different solutions to this problem. This paper examines the different methods used in the literature and explains when the different methods yield the same (and correct) standard errors and when they diverge. The intent is to provide intuition as to why the different approaches sometimes give different answers and give researchers guidance for their use. The Author 2008. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please email: [email protected], Oxford University Press.