These findings are consistent with prior studies of aggregate labor market effects following hurricanes and other natural disasters such as earthquakes and tornados. Aggregate Patterns Show Short-Lived Negative Labor Market EffectsĬonsidering aggregate labor force patterns for all individuals ages 25–64 in the Katrina-affected states, the researchers found relatively short-term negative labor market consequences followed by eventual recovery. These groups could also be compared with individuals in other states not affected by the hurricane. Thus, the researchers could examine the characteristics and labor market outcomes for three specific groups in the Katrina-affected states, namely, those who did not evacuate, those who evacuated temporarily and returned, and those who evacuated and never returned in the first year following the hurricane. This is because the CPS added several questions to the survey conducted monthly from October 2005 to October 2006 to track individuals who were displaced to any other part of the United States even temporarily because of the hurricane. The CPS also provides an opportunity that has not been available in research on other natural disasters - to go beyond aggregate measures of labor market indicators to examine outcomes for individuals directly affected by the hurricane. These indicators were examined before and after the hurricane for each of the four states and compared with patterns in states not affected by Katrina and in the United States as a whole. (2) the percentage of people in that age group who are employed (3) the percentage of labor force participants who are unemployed, also known as the unemployment rate and (4) the percentage of the employed who are self-employed. Or not employed but actively looking for work The researchers focused on trends over time for four key outcomes for individuals ages 25–64: (1) the percentage of people in that age group who are considered to be labor force participants, i.e., they may be either employed Researchers from the RAND Corporation Gulf States Policy Institute used data from the federal monthly Current Population Survey (CPS) to examine the short- and longer-term influences of Hurricane Katrina on individuals and labor markets in Alabama, Florida, Louisiana, and Mississippi - the states most affected by the storm. Decisionmakers who are guiding economic recovery in the Gulf States and those who must consider how to handle future disasters need to know how Katrina affected local employment levels generally and how it affected workers and their jobs, including, more specifically, those displaced to other regions. Natural disasters usually involve temporary disruptions to the local economy through direct and indirect effects on local infrastructure, business structures and other business capital, residences, and the population, especially the workforce. Another important consideration is its effect on labor markets. The estimated $100 billion in damages from Hurricane Katrina in August 2005 is just one gauge of the hurricane's economic effect. For example, evacuees who did not return had higher labor force dropout and unemployment rates but also the highest rates of self-employment up to one year later. But these aggregate patterns mask important differences for some groups affected by the hurricane. One year after Katrina, the percentage of people working or looking for work in the Katrina-affected states had rebounded to earlier levels except in Mississippi. Analysis of data on the effects of Hurricane Katrina on the labor market experience of individuals ages 25–64 in Alabama, Florida, Louisiana, and Mississippi shows that the aggregate detrimental labor market effects of natural disasters may be short-lived.
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