The Fiscal Cost of Hurricanes: Disaster Aid Versus Social Insurance

44 Pages Posted: 24 May 2016

Date Written: May 2016

Abstract

Little is known about the fiscal costs of natural disasters, especially regarding social safety nets that do not specifically target extreme weather events. This paper shows that US hurricanes lead to substantial increases in non-disaster government transfers, such as unemployment insurance and public medical payments, in affected counties in the decade after a hurricane. The present value of this increase significantly exceeds that of direct disaster aid. This implies, among other things, that the fiscal costs of natural disasters have been significantly underestimated and that victims in developed countries are better insured against them than previously thought.

Suggested Citation

Deryugina, Tatyana, The Fiscal Cost of Hurricanes: Disaster Aid Versus Social Insurance (May 2016). NBER Working Paper No. w22272. Available at SSRN: https://ssrn.com/abstract=2783186

Tatyana Deryugina (Contact Author)

University of Illinois ( email )

1206 South Sixth Street
Champaign, IL 61820
United States

HOME PAGE: http://deryugina.com

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