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Title:How hurricanes affect employment and wages in local labor markets PDF Logo
Authors:Belasen, Ariel R.
Polachek, Solomon W.
Issue Date:2008
Series/Report no.:IZA discussion papers 3407
Abstract:This paper adopts a generalized-difference-in-difference (GDD) technique outlined in Ariel R. Belasen and Solomon W. Polachek (IZA Discussion Paper #2976) to examine the impact of hurricanes on the labor market. We find that earnings of the average worker in a Florida county rises over 4% within the first quarter of being hit by a major Category 4 or 5 hurricane relative to counties not hit, and rises about 1¼% for workers in Florida counties hit by less major Category 1-3 hurricanes. Concomitantly, employment falls between 1½ and 5% depending on hurricane strength. On the other hand, the effects of hurricanes on neighboring counties have the opposite effects, moving earnings down between 3 and 4% in the quarter the hurricane struck. To better examine the specific shocks, we also observe sectoral employment shifts. Finally, we conduct a time-series analysis and find that over time, there is somewhat of a cobweb with earnings and employment rising and falling each quarter over a two-year time period.
Subjects:Exogenous shock
difference-in-difference estimation
local labor market
earnings
employment
sectoral shifts
JEL:J23
Persistent Identifier of the first edition:urn:nbn:de:101:1-2008032097
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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