The Effects of Supply Chain Disruptions Caused by the Great East Japan Earthquake on Workers

The Great East Japan Earthquake affected not only local workers employed by establishments that were directly damaged, but also those of their trading partners through supply chain disruptions. I estimate the effect of such indirect shocks to workers on their job separation, inter-industry mobility, geographical relocation, and employment status in the following years. I find that such shocks increased job separation in the study period. This increased job separation did not increase inter-industry mobility, but rather induced relocation to other prefectures. The effect on employment status was mixed. Although the self-reported indicator of being affected by the earthquake is significantly correlated with negative outcomes such as high unemployment, the proxy for the production decline at the prefecture-industry level is uncorrelated with employment status. This result implies that people who faced a negative employment shock may have attributed it to the exogenous event, which could cause substantial bias in the self-reported data on the effect of disasters.