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ECONOMIC IMPACTS OF MIGRATION AND BRAIN DRAIN AFTER MAJOR CATASTROPHE: THE CASE OF HURRICANE KATRINA

Qin Fan and Meri Davlasheridze ()
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Qin Fan: Department of Economics, Craig School of Business, California State University, Fresno, 5245 N. Backer Ave, M/S PB20, Fresno, CA, 93740, USA
Meri Davlasheridze: Department of Marine Sciences, Texas A&M University, Galveston, Galveston, TX 77551, USA

Climate Change Economics (CCE), 2019, vol. 10, issue 01, 1-21

Abstract: We develop a county-level recursive dynamic computable general equilibrium (CGE) model of Orleans Parish (OP) to examine local economic impacts of migration and brain drain after Hurricane Katrina. To incorporate hurricane-induced brain drain in the CGE model, we use a reduced-form model to estimate the change in the share of college graduates caused by hurricane-induced damages. Calibrating the model using pre-disaster social accounting matrices (SAMs) in 2004, we find that permanent loss in population and skilled labor results in 33.57% decline in county-level gross regional product (GRP) in 2012 relative to the 2012 business as usual scenario (BAU) that assumes steady annual growth without Hurricane Katrina. Interestingly, we find that skill loss causes larger decline in GRP than overall decline in population. After accounting for post-disaster public assistance by recalibrating model using 2012 SAMs, we find a lower declining rate of 6.36% in GRP.

Keywords: Hurricane Katrina; brain drain; local economic impacts; CGE model (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1142/S2010007819500040

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