The Economic Impact of Inland Flooding in the United States: A Disaggregated Analysis

This paper examines the labor market impact of flood exposures using county-level quarterly employment and wage data from 1996-2023 for the contiguous US. We distinguish between flash floods with sudden, rapid and violent onset and floods with gradual, slower onset patterns. Our results show that an additional day of flash floods in a quarter reduces county-level employment and wages by 0.13% and 0.15% respectively. These sub-annual effects dissipate at annual frequencies, suggesting possible labor market adjustments that occur over time. Importantly, we document events occurring during federally declared emergency periods have an attenuated labor market impact compared to events outside of federally declared periods. Other heterogeneous effects reveal that economically vulnerable counties such as those with high labor market slack, experience substantially larger negative impacts from both flood types. While coastal counties face larger impacts, inland counties also suffer negative economic disruptions. Our findings uncover important sub-annual labor market disruptions that vary strikingly by local economic conditions and policy responses. Identifying these sub-annual labor market impacts could be crucial for understanding economic welfare losses and designing or improving rapid policy responses.