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How Disasters Affect Local Labor Markets: The Effects of Hurricanes in Florida

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  • Ariel R. Belasen
  • Solomon W. Polachek

Abstract

This study improves upon the Difference in Difference approach by examining exogenous shocks using a Generalized Difference in Difference (GDD) technique that identifies economic effects of hurricanes. Based on the Quarterly Census of Employment and Wages data, worker earnings in Florida counties hit by a hurricane increase up to 4 percent, whereas earnings in neighboring counties decrease. Over time, workers experience faster earnings and slower employment growth than workers in unaffected counties. Hurricanes have a greater impact in coastal and Panhandle counties, and powerful hurricanes have greater economic effects than weaker ones. Further, the GDD technique is applicable to analyze a wider range of exogenous shocks than hurricanes.

Suggested Citation

  • Ariel R. Belasen & Solomon W. Polachek, 2009. "How Disasters Affect Local Labor Markets: The Effects of Hurricanes in Florida," Journal of Human Resources, University of Wisconsin Press, vol. 44(1).
    • Handle: RePEc:uwp:jhriss:v:44:y:2009:i1:p251-276
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    More about this item

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J49 - Labor and Demographic Economics - - Particular Labor Markets - - - Other
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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    This item is featured on the following reading lists, Wikipedia, or ReplicationWiki pages:
    1. Labor Economics (ECON 431-531)

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