Economic Decisions and Social Norms in Life and Death Situations

Abstract: Essay 1: (with Mikael Elinder) Since the sinking of the Titanic, there has been a widespread belief that the social norm of “women and children first” (WCF) gives women a survival advantage over men in maritime disasters, and that captains and crew members give priority to passengers. We analyze a database of 18 maritime disasters spanning three centuries, covering the fate of over 15,000 individuals of more than 30 nationalities. Our results provide a unique picture of maritime disasters. Women have a distinct survival disadvantage compared with men. Captains and crew survive at a significantly higher rate than passengers. We also find that: the captain has the power to enforce normative behavior; there seems to be no association between duration of a disaster and the impact of social norms; women fare no better when they constitute a small share of the ship’s complement; the length of the voyage before the disaster appears to have no impact on women’s relative survival rate; the sex gap in survival rates has declined since World War I; and women have a larger disadvantage in British shipwrecks. Taken together, our findings show that human behavior in life-and-death situations is best captured by the expression “every man for himself.”Essay 2: (with Henry Ohlsson) The objective of this essay is to study to what extent parents divide their estates unequally between their children and the determinants of this decision. We use a new dataset based on the estate reports for almost 70,000 Swedish widows, widowers, divorcees and unmarried individuals who died with positive estates and at least two children. Unequal sharing is unusual; depending on definitions only 2–12 percent of the estates are unequally divided. Previous studies for other countries, particularly from the US, find that around 20–40 percent of parents divide their estates unequally. We argue that the relatively low frequency of unequal sharing in Sweden might be explained by contextual factors such as the inheritance law, the transfer tax system, the income distribution, and the welfare state. We also estimate models with family fixed effects to study how the characteristics of children to parents who choose unequal division affect the size of the transfer. The empirical estimates show that bequests are not used to compensate for income differences between children, suggesting that bequests are not guided by altruistic motives. Children who are likely to have provided services to the parent receive more than their siblings however. This suggests that, at least some bequests are guided by exchange motives.Essay 3: (with Mikael Elinder and Henry Ohlsson) The objective of this essay is to study when and how much labor and capital income of heirs respond to inheritances. We estimate fixed effects models following direct heirs, inheriting in 2004, during the years 2000–2008 using Swedish panel data. Our first main result is that the more the heir inherits, the lower her labor income becomes. This labor income effect appears in the years after the heir had inherited and is stronger for old heirs than for young heirs. We also find evidence of anticipation effects that occur before the actual transfer. Our second main result is that the more the heir inherits, the higher her capital income becomes. This effect only appears in the years after receiving the inheritance. It seems to be dissipating after a couple of years.Essay 4: This essay contributes in two ways to the literature on the effects of economic circumstances on health. First, it deals with reverse causality and omitted variable bias by exploiting previously exogenous variation in inherited wealth generated by the unexpected repeal of the Swedish inheritance tax. Second, it analyzes responses in health outcomes from administrative registers. The results show that increased wealth has limited impacts on objective adult health over a period of six years. This is in line with what has been documented previously regarding subjective health outcomes. If anything, it appears as if the wealth shock resulting from the tax reform leads people to seek care for symptoms of disease, which result in that cancer is detected and possibly treated earlier. One possible explanation for this preventive response is that good health is needed for enjoying the improved consumption prospects generated by the wealth shock.