Working Paper: NBER ID: w22272
Authors: Tatyana Deryugina
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.
Keywords: hurricanes; disaster aid; social insurance; fiscal costs
JEL Codes: H53; H84; Q54
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Hurricanes (Q54) | Non-disaster transfers (H84) |
| Hurricanes (Q54) | Disaster aid (H84) |
| Disaster aid (H84) | Offset of direct damage (C22) |
| Hurricanes (Q54) | Economic shocks (F69) |
| Non-disaster transfers (H84) | Insurance against economic shocks (G52) |
| Hurricanes (Q54) | Average earnings in affected counties (J31) |