Working Papers

Paying Income Tax after a Natural Disaster: The Case of the 2010-11 Queensland Floods

(with Mehmet Ulubasoglu)

Abstract: This paper investigates the perpetual effects of a natural disaster on the fiscal system by estimating the changes in individuals’ tax deduction and tax payable patterns in the disaster zone. Using individual-level annual tax return data and employing a difference-in-differences method in the case of the 2010-2011 Queensland floods in Australia, our key findings indicate that the floods led to a non-transitory increase in tax deductions for high-income taxpayers. Accompanying this was a transitory, yet substantial, decline in taxes payable by this income group. Most of the increase in tax deductions was driven by professionals and technicians in high-technology sectors. In broader population, we detect spikes in tax deductions related to gifts and donations and work-related car, clothing or ‘other’ expenses. We contribute to the literature by analysing the taxpayer response to a disaster, highlighting disasters’ negative effects on the economy in the form of increased tax deductions and forgone tax revenue, and differential fiscal response from victims. Our findings also offer important policy implications regarding how best to formulate the post-disaster relief and assistance budgets to avoid crippling income losses for individuals.

Retirement Saving Decisions by Victims of a Natural Disaster

(with Mehmet Ulubasoglu and Ha Vu)

Abstract: Intertemporal preferences play a significant role in shaping consumer spending and economic activity, which are among the determinants for the recovery from a disaster. Retirement savings conveying information on the time preferences of individuals and constitutes a saving mechanism that results in an intertemporal shift of earnings. Any change to consumption and saving decisions following a disaster would have implications on the economic recovery of the disaster region. Using administrative data and a natural experimental design, this study investigates the effects of natural disasters on retirement savings in the aftermath of the 2010-11 Queensland Floods. Our findings document a temporary increase in retirement savings following the disaster. Our back-of-the-envelope calculations suggests AU$ 412.8 millions more retirement savings in the disaster area after the floods. Our results are robust to an array of robustness checks and satisfy the parallel trends assumption.

Work in Progress

Post-disaster Childcare Dynamics: Economic Policy Implications for Australia

(with Mehmet Ulubasoglu)

Report Contributions

Assessing Regional Competitiveness in Turkey

OECD, Global Relations Secretariat, 2016

Strengthening the Spatial Dimension in the Sector Strategies of Turkey

OECD, Global Relations Secretariat, 2016