Storms and Jobs: The Effect of Hurricanes on Individuals’ Employment and Earnings over the Long Term

Jeffrey A. Groen, Mark J. Kutzbach, and Anne E. Polivka

Abstract

Hurricanes Katrina and Rita devastated the U.S. Gulf Coast in 2005, destroying homes and businesses and causing mass evacuations. Using data that tracks workers over nine years, we estimate models that compare the evolution of earnings for workers who resided in storm affected areas with those who resided in suitable control counties. We find a modestly negative average treatment effect in the year after the storms but a positive effect on earnings starting in the third year. We provide evidence that the long-term earnings gains resulted from wage growth in the affected areas, especially in industry sectors related to rebuilding.