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Labor Shakes: Mid-Run Effects of the 27F Earthquake on Unemployment

Author

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  • Karnani, Mohit

Abstract

I exploit the exogenous characteristic of a natural disaster occurred in Chile in order to explain its effects on general unemployment over affected and unaffected regions of the country in a mid-run timespan of 5 measured years. By using a fixed effect panel data regression model, I find that regions closer to the epicentre of the 27F earthquake showed signicantly deeper reductions of unemployment over the time in comparison to those regions which are further from the epicentre. This effect was not observed in a signicant way when using a short-run subsample of two years. I also perform diverse robustness checks over the estimates, all of which strongly support these findings. Thus, I conclude that more affected regions received a prime on unemployment reduction in the mid-run lapse of these four years after the earthquake.

Suggested Citation

  • Karnani, Mohit, 2015. "Labor Shakes: Mid-Run Effects of the 27F Earthquake on Unemployment," MPRA Paper 68935, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:68935
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    References listed on IDEAS

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    1. A. W. Phillips, 1958. "The Relation Between Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom, 1861–1957," Economica, London School of Economics and Political Science, vol. 25(100), pages 283-299, November.
    2. Eduardo Cavallo & Sebastian Galiani & Ilan Noy & Juan Pantano, 2013. "Catastrophic Natural Disasters and Economic Growth," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1549-1561, December.
    3. Loayza, Norman V. & Olaberría, Eduardo & Rigolini, Jamele & Christiaensen, Luc, 2012. "Natural Disasters and Growth: Going Beyond the Averages," World Development, Elsevier, vol. 40(7), pages 1317-1336.
    4. Scott A. Imberman & Adriana D. Kugler & Bruce I. Sacerdote, 2012. "Katrina's Children: Evidence on the Structure of Peer Effects from Hurricane Evacuees," American Economic Review, American Economic Association, vol. 102(5), pages 2048-2082, August.
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    Cited by:

    1. Tillmann Heidelk, 2019. "The Returns to Education in the Context of a Natural Disaster: Evidence from the 2010 Earthquake in Haiti," Working Papers ECARES 2019-17, ULB -- Universite Libre de Bruxelles.

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    Keywords

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    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
    • 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
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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