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Measuring the effects of the September 11 attack on New York City

  • Jason Bram
  • James Orr
  • Carol Rapaport

The attack on the World Trade Center had an enormous financial, as well as emotional, impact on New York City. This article measures the short-term economic effects on the city's labor force and capital stock through June 2002, the end of the recovery process at the World Trade Center site. Using a lifetime-earnings loss concept, the authors estimate that the nearly 3,000 workers killed in the attack lost $7.8 billion in prospective income. Moreover, the employment impact in the key affected sectors - such as finance, air transportation, hotels, and restaurants - translated into an estimated earnings shortfall of $3.6 billion to $6.4 billion, while the cost of repairing and replacing the damaged physical capital stock and infrastructure totaled an estimated $21.6 billion. Accordingly, the authors determine that the total attack-related cost to New York City through June 2002 was between $33 billion and $36 billion. The article also examines the attack's effects on the city's most economically vulnerable residents and analyzes survey findings on the incidence of post-traumatic stress disorder and alcohol and drug use after September 11.

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Article provided by Federal Reserve Bank of New York in its journal Economic Policy Review.

Volume (Year): (2002)
Issue (Month): Nov ()
Pages: 5-20

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Handle: RePEc:fip:fednep:y:2002:i:nov:p:5-20:n:v.8no.2
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