Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/35104 
Year of Publication: 
2008
Series/Report no.: 
IZA Discussion Papers No. 3407
Publisher: 
Institute for the Study of Labor (IZA), Bonn
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: 
Document Type: 
Working Paper

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