Thursday, March 18, 2010

Yu Xiao, Assistant Professor, Department of Landscape Architecture and Urban Planning, Texas A&M University

LOCATION: Greenbrier Room Mountainlair TIME: 12:30-1:30 p.m. Light buffet lunch served at noon.

Economic Impacts of Hurricanes: Labor Market Adjustment after the Unexpected

RRI SEMINAR SERIES

REGIONAL RESEARCH INSTITUTE

ABSTRACT: Hurricane is one of the most frequent and costly natu-

Regional Research Institute West Virginia University P.O. Box 6825

Phone: 304-293-2897 E-mail: rri@mail.wvu.edu Website: www.rri.wvu.edu

ral hazards in the United States. It accounted for more than 30 percent of presidential disaster declarations from 1964 to 2007 (FEMA 2007). Research shows that because of global climate change, there would be more frequent and more intense cyclones (typhoons and hurricanes) in the future (IPCC 2007). This paper applies a time-series analysis approach to assess economic impacts of hurricanes, using the State of Louisiana as an example. All hurricanes and tropical storms during 1990-2008 that led to presidential declarations in the State of Louisiana were examined. Results indicate that Louisiana state economy measured by unemployment rate, employment, and personal income was resilient to most of the hurricane/tropical storm events except Hurricane Katrina. This study also finds that labor market was able to make quick adjustment (measured by unemployment rate dropping back to its equilibrium levels) after major interruption. However, labor market size might shrink as a result of out-migration. It may take years before employment can return to pre-disaster levels after a catastrophic event like Hurricane Katrina.

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