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Shaking up the Equilibrium: Natural Disasters, Immigration and Economic Geography

Author

Listed:
  • Philipp Ager

    (Department of Business and Economics, University of Southern Denmark)

  • Casper Worm Hansen

    (Department of Economics, University of Copenhagen)

  • Lars Lønstrup

    (Department of Business and Economics, University of Southern Denmark)

Abstract

This paper investigates the effects of a large temporary shock on the agglomeration of economic activity. Using variation in the potential damage intensity of the 1906 San Francisco earthquake across counties in the American West, we ?find that the earthquake persistently decreased various measures of economic activity, such as population size and total wage expenditures. The main reason for this long-lasting effect is that the earthquake changed the location choice of migrants, who decided to settle in less affected areas of the American West. Our fi?ndings suggest that a large temporary shock can have a persistent effect on the location of economic activity.

Suggested Citation

  • Philipp Ager & Casper Worm Hansen & Lars Lønstrup, 2015. "Shaking up the Equilibrium: Natural Disasters, Immigration and Economic Geography," Discussion Papers 15-17, University of Copenhagen. Department of Economics.
    • Handle: RePEc:kud:kuiedp:1517
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    References listed on IDEAS

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    More about this item

    Keywords

    Natural Disasters; Economic Development; Location of Economic Activity; Immigration;
    All these keywords.

    JEL classification:

    • N9 - Economic History - - Regional and Urban History
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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