Shaking Up the Equilibrium: Natural Disasters, Economic Activity, and Immigration

Discussion Papers on Business and Economics, University of Southern Denmark, 2/2018

38 Pages Posted: 12 Feb 2018

See all articles by Philipp Ager

Philipp Ager

University of Southern Denmark - Department of Business and Economics; Centre for Economic Policy Research (CEPR)

Casper Worm Hansen

University of Copenhagen - Department of Economics; University of Copenhagen

Lars Lønstrup

University of Southern Denmark - Department of Business and Economics

Date Written: February 12, 2018

Abstract

This paper examines the long-run effects on the spatial distribution of economic activity caused by historical shocks. Using variation in the potential damage intensity of the 1906 San Francisco Earthquake across cities in the American West, we show that more severely affected cities experienced lower population growth relative to less affected cities after the earthquake. This negative effect persisted until the late 20th century. The earthquake diverted migrants to less affected areas in the region, which, together with reinforcing dynamic agglomeration effects from scale economies, left a long-lasting mark on the location of economic activity in the American West.

Keywords: Economic Geography, Location of Economic Activity, Migration, Natural Disasters

JEL Classification: N9, O15, O40, R11, R12

Suggested Citation

Ager, Philipp and Hansen, Casper Worm and Lønstrup, Lars, Shaking Up the Equilibrium: Natural Disasters, Economic Activity, and Immigration (February 12, 2018). Discussion Papers on Business and Economics, University of Southern Denmark, 2/2018. Available at SSRN: https://ssrn.com/abstract=3122215 or http://dx.doi.org/10.2139/ssrn.3122215

Philipp Ager (Contact Author)

University of Southern Denmark - Department of Business and Economics ( email )

DK-5230 Odense
Denmark

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Casper Worm Hansen

University of Copenhagen - Department of Economics ( email )

Øster Farimagsgade 5
Copenhagen K, DK 1153
Denmark

University of Copenhagen ( email )

Nørregade 10
Copenhagen, København DK-1165
Denmark

Lars Lønstrup

University of Southern Denmark - Department of Business and Economics ( email )

HOME PAGE: http://www.sdu.dk/staff/loe.aspx

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