The Economic Impact of Hurricane Katrina on its Victims: Evidence from Individual Tax Returns

Tatyana Deryugina, Laura Kawano and Steven Levitt

No 20713, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Hurricane Katrina destroyed more than 200,000 homes and led to massive economic and physical dislocation. Using a panel of tax return data, we provide one of the first comprehensive analyses of the hurricane’s long-term economic impact on its victims. Katrina had large and persistent impacts on where people live; small and mostly transitory impacts on wage income, employment, total income, and marriage; and no impact on divorce or fertility. Within just a few years, Katrina victims’ incomes fully recover and even surpass that of controls from similar cities that were unaffected by the storm. The strong economic performance of Katrina victims is particularly remarkable given that the hurricane struck with essentially no warning. Our results suggest that, at least in this particular disaster, aid to cover destroyed assets and short-run income declines was sufficient to make victims financially whole. Our results provide some optimism regarding the costs of climate-change driven dislocation, especially when adverse events can be anticipated well in advance.

JEL-codes: Q54 (search for similar items in EconPapers)
Date: 2014-11
New Economics Papers: this item is included in nep-env
Note: EEE PE
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Published as Deryugina, Tatyana, Laura Kawano, and Steven Levitt. 2018. "The Economic Impact of Hurricane Katrina on Its Victims: Evidence from Individual Tax Returns." American Economic Journal: Applied Economics, 10 (2): 202-33. DOI: 10.1257/app.20160307

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