Storms and Jobs: The Effect of Hurricanes on Individuals’ Employment and Earnings over the Long Term*

Jeffrey A. Groen†, Mark Kutzbach and Anne E. Polivka‡

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: Hurricanes Katrina and Rita devastated the U.S. Gulf Coast in 2005, destroying homes and businesses and causing mass evacuations. The economic effects of disasters are often studied at a regional level, but little is known about the responsiveness of individuals’ employment and earnings to the damages, disruption, and rebuilding—particularly in the longer run. Our analysis is based on data that tracks workers over nine years, including seven years after the storms. We estimate models that compare the evolution of earnings for workers who resided in a storm-affected area with those who resided in a suitable control counties. We find that, on average, the storms reduced the earnings of affected individuals during the first year after the storm. These losses reflect various aspects of the short-run disruption caused by the hurricanes, including job separations, migration to other areas, and business contractions. Starting in the third year after the storms, however, we find that the earnings of affected individuals outpaced the earnings of individuals in the control sample. We provide evidence that the long-term earnings gains were the result of wage growth in the affected areas relative to the control areas, due to reduced labor supply and increased labor demand, especially in sectors related to rebuilding. Despite the short-term earnings losses, we find a net increase in average quarterly earnings among affected individuals over the entire post-storm period. However, those who worked in sectors closely tied to tourism or the size of the local population experienced net earnings losses.

Keywords: Disaster; Hurricane; Employment; Earnings; Local Labor Markets; Katrina; Rita (search for similar items in EconPapers)
JEL-codes: J60 Q54 R23 (search for similar items in EconPapers)
Pages: 76 pages
Date: 2015-01
New Economics Papers: this item is included in nep-ger and nep-lab
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Citations: View citations in EconPapers (13)

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https://www2.census.gov/ces/wp/2015/CES-WP-15-21R.pdf Revised version, 2016 (application/pdf)
https://www2.census.gov/ces/wp/2015/CES-WP-15-21.pdf First version, 2015 (application/pdf)
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Related works:
Journal Article: Storms and Jobs: The Effect of Hurricanes on Individuals’ Employment and Earnings over the Long Term (2020)
Working Paper: Storms and Jobs: The Effect of Hurricanes on Individuals’ Employment and Earnings over the Long Term (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:15-21

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