Date of Award

Summer 8-11-2020

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Economics

First Advisor

James H. Marton

Second Advisor

Jorge Martinez-Vazquez

Third Advisor

Michael Pesko

Fourth Advisor

Angela Snyder

Abstract

This dissertation examines the health and economic consequences of recurring natural disasters by estimating the effect of hurricane exposure on various health outcomes, as well as associated changes in labor supply and housing cost. Considering that a substantial portion of the US population lives in hurricane-prone areas, and hurricanes are likely to grow in magnitude in future as a result of global warming, understanding the full short and long-term impacts of hurricanes are essential to craft optimal policy responses.

The first chapter on this topic, “Behavioral Health Burden of Hurricane Katrina”, evaluates the long-lasting effects of Hurricane Katrina on the mental health and risky health behaviors of individuals residing in affected counties in the seven years after the disaster. The majority of earlier studies on Katrina focus only on immediate and short-term mental health effects, and sometimes lack pre-disaster data and / or an appropriate control group, as well as using data that only include a small subsample of survivors. I address these shortcomings in the literature by using the Behavioral Risk Factor Surveillance System, a large individual-level dataset that provides information on my outcomes of interest before and after Katrina for randomly selected individuals residing in Katrina affected counties. I use both difference-in-differences and synthetic control methods to estimate the causal impact of Katrina. I find that Katrina impaired individual mental health and increased the likelihood of smoking, and these effects persisted over the years.

In the second chapter, I consider a more comprehensive set of health outcomes for a large set of hurricanes over a long-time period. While a growing body of research shows the long-term adverse effects of extreme weather events on growth, employment, and income, we know little about the short and long-term impacts of these events on the health of adults, which can adversely affect labor productivity and reduce economic activity. By using spatial data on hurricane strikes linked to individual-level panel data from the restricted version of the Panel Survey of Income Dynamics between 1990 and 2017, I estimate both the short and long-term effects of hurricanes on the health of adults. I compare hurricane survivors (i.e. those residing in counties struck by a hurricane) to those who were not exposed to a hurricane but resided in the same state in a difference-in-differences framework. The results show that exposure to a hurricane has a negative and substantial impact on the mental health of survivors in the decade after the disaster, while I find no statistical impact on the probability of reporting poor physical health, smoking, or heavy drinking. To see why psychological distress may be increasing, I consider two potential channels: economic losses and traumatic experiences following hurricane exposure. The results show no change in the household income, the earnings, and other labor market outcomes after hurricane exposure. Thus, my findings suggest that the long-lasting worse mental health impact is likely driven by traumatic experiences rather than the economic reasons. In addition, I find that low-educated individuals differentially suffer from worse physical health that may be resulting from the increase in the likelihood of reporting disability in the ten years after hurricane exposure. These findings provide one of the first comprehensive estimates of the impact of hurricanes on the health of adults in the United States. Moreover, since poor health can reduce labor productivity, my results may partially explain recent findings from the macroeconomics literature, which suggests these recurring disasters reduce economic productivity and increase non-disaster government expenditures such as unemployment and public medical insurance payments.

The third chapter examines the long-lasting impacts of hurricanes based on renter status. Recent studies show that hurricanes only have small economic effects on survivors. In this essay, I show that this may not be the case for renters. I estimate the long-lasting effects of hurricane exposure on monthly rental payments, as well as the health and labor supply of renters. I merge spatial data on hurricane strikes with individual-level longitudinal data from the restricted version of the Panel Survey of Income Dynamics for the period 1990 - 2017. Using difference-in-differences and triple difference models, I compare hurricane survivors to those who were not exposed to a hurricane but lived in the same state. The results show that hurricane exposure increased monthly rental payments for renters, while I find no statistically significant impact on monthly mortgage payments and self-reported house value for homeowners. Moreover, renters experienced worse physical health and increased their labor supply at the intensive margin (i.e., worked longer hours) in the following years after hurricane exposure. Given the fact that twenty percent of the US population lives in the path of hurricane strikes, understanding the heterogeneous impact on renters allows for a more complete estimate of the costs of hurricanes. This information is an essential input to create an optimal policy response.

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