Facts about Hurricane Katrina, and the benefits of regional migration

In 2006, the year after the storm, wage and salary income for the average Katrina victim in our sample is roughly $2,200 lower than their matched counterparts.  Remarkably, the earnings gap is erased the following year, and by 2008, the hurricane victims actually have higher wage income and total income than control households.

That is from a new NBER working paper by Tatyana Deryugina, Laura Kawano, and Steven Levitt.  I agree with this claim:

…strong ties to a place, especially a place with limited economic opportunities such as New Orleans, have adverse economic consequences.  When forced by an exogenous shock to migrate, people are able to choose from a wide range of possible locations to move to, and they seem to choose places that offer them better economic opportunities.

You will find an ungated version here.


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