How Hurricanes Affect Employment and Wages in Local Labor Markets
AbstractThis paper adopts a generalized-difference-in-difference (GDD) technique outlined in Ariel R. Belasen and Solomon W. Polachek (IZA Discussion Paper #2976) to examine the impact of hurricanes on the labor market. We find that earnings of the average worker in a Florida county rises over 4% within the first quarter of being hit by a major Category 4 or 5 hurricane relative to counties not hit, and rises about 1¼% for workers in Florida counties hit by less major Category 1-3 hurricanes. Concomitantly, employment falls between 1½ and 5% depending on hurricane strength. On the other hand, the effects of hurricanes on neighboring counties have the opposite effects, moving earnings down between 3 and 4% in the quarter the hurricane struck. To better examine the specific shocks, we also observe sectoral employment shifts. Finally, we conduct a time-series analysis and find that over time, there is somewhat of a cobweb with earnings and employment rising and falling each quarter over a two-year time period.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3407.
Length: 13 pages
Date of creation: Mar 2008
Date of revision:
Publication status: published in: American Economic Review, 2008, 98 (2), 49-53
Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Find related papers by 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
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-04-04 (All new papers)
- NEP-GEO-2008-04-04 (Economic Geography)
- NEP-LAB-2008-04-04 (Labour Economics)
- NEP-LTV-2008-04-04 (Unemployment, Inequality & Poverty)
- NEP-URE-2008-04-04 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alberto Abadie & Alexis Diamond & Jens Hainmueller, 2007.
"Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California's Tobacco Control Program,"
NBER Working Papers
12831, National Bureau of Economic Research, Inc.
- Alberto Abadie & Alexis Diamond & Jens Hainmueller, 2007. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California's Tobacco Control Program," NBER Technical Working Papers 0335, National Bureau of Economic Research, Inc.
- Lucas, Robert E, Jr & Rapping, Leonard A, 1969. "Price Expectations and the Phillips Curve," American Economic Review, American Economic Association, vol. 59(3), pages 342-50, June.
- Joshua Angrist & Alan Krueger, 1998.
"Empirical Strategies in Labor Economics,"
780, Princeton University, Department of Economics, Industrial Relations Section..
- Belasen, Ariel R. & Polachek, Solomon, 2007.
"How Disasters Affect Local Labor Markets: The Effects of Hurricanes in Florida,"
IZA Discussion Papers
2976, Institute for the Study of Labor (IZA).
- 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).
- Paulo Guimaraes & Frank L. Hefner & Douglas P. Woodward, 1993. "Wealth And Income Effects Of Natural Disasters: An Econometric Analysis Of Hurricane Hugo," The Review of Regional Studies, Southern Regional Science Association, vol. 23(2), pages 97-114, Fall.
- Eric Strobl, 2011.
"The Economic Growth Impact of Hurricanes: Evidence from U.S. Coastal Counties,"
The Review of Economics and Statistics,
MIT Press, vol. 93(2), pages 575-589, May.
- Eric Strobl, 2009. "The Economic Growth Impact of Hurricanes: Evidence from US Coastal counties," Working Papers hal-00392382, HAL.
- Strobl, Eric, 2008. "The Economic Growth Impact of Hurricanes: Evidence from US Coastal Counties," IZA Discussion Papers 3619, Institute for the Study of Labor (IZA).
- Deryugina, Tatyana, 2011. "The Role of Transfer Payments in Mitigating Shocks: Evidence From the Impact of Hurricanes," MPRA Paper 53307, University Library of Munich, Germany, revised 08 Aug 2013.
- Döhrmann, David & Gürtler, Marc & Hibbeln, Martin, 2013. "Insured loss inflation: How natural catastrophes affect reconstruction costs," Working Papers IF44V2, Technische Universität Braunschweig, Institute of Finance.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).
If references are entirely missing, you can add them using this form.