Labor Shakes: Mid-Run Effects of the 27F Earthquake on Unemployment

Karnani, Mohit (2015): Labor Shakes: Mid-Run Effects of the 27F Earthquake on Unemployment.

Abstract

I exploit the exogenous characteristic of a natural disaster occurred in Chile in order to explain its effects on general unemployment over affected and unaffected regions of the country in a mid-run timespan of 5 measured years. By using a fixed effect panel data regression model, I find that regions closer to the epicentre of the 27F earthquake showed signicantly deeper reductions of unemployment over the time in comparison to those regions which are further from the epicentre. This effect was not observed in a signicant way when using a short-run subsample of two years. I also perform diverse robustness checks over the estimates, all of which strongly support these findings. Thus, I conclude that more affected regions received a prime on unemployment reduction in the mid-run lapse of these four years after the earthquake.

• Item Type: MPRA Paper
• Language: English
• Keywords: earthquake, unemployment, exogenous variation
• Subjects: J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J64 - Unemployment: Models, Duration, Incidence, and Job Search; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O54 - Latin America ; Caribbean; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q54 - Climate ; Natural Disasters and Their Management ; Global Warming; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R15 - Econometric and Input-Output Models ; Other Models

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