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How Disasters Affect Local Labor Markets: The Effects of Hurricanes in Florida
- Journal of Human Resources
- University of Wisconsin Press
- Volume 44, Number 1, Winter 2009
- pp. 251-276
- 10.1353/jhr.2009.0014
- Article
- Additional Information
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This study improves upon the Difference in Difference approach by examining exogenous shocks using a Generalized Difference in Difference (GDD) technique that identifies economic effects of hurricanes. Based on the Quarterly Census of Employment and Wages data, worker earnings in Florida counties hit by a hurricane increase up to 4 percent, whereas earnings in neighboring counties decrease. Over time, workers experience faster earnings and slower employment growth than workers in unaffected counties. Hurricanes have a greater impact in coastal and Panhandle counties, and powerful hurricanes have greater economic effects than weaker ones. Further, the GDD technique is applicable to analyze a wider range of exogenous shocks than hurricanes.