òòò½Íø Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
Expecting Floods: Firm Entry, Employment, and Aggregate Implications
òòò½Íø Journal: Macroeconomics
(pp. 42–76)
Abstract
Using county-level and zip-code-level data from the United States during the period 1998–2018, we document: (i) Increased flood risk has a large negative impact on firm entry, employment, and output in the long run; (ii) Flood events reduce output in the short run while impact on firm entry and employment is limited. We then develop a quantitative spatial model to characterize how flood risk shapes firms' location choices and employment. We find flood risk reduced US aggregate output by 0.53 percent in 2018, 23 percent of which stemmed from direct damages and 77 percent from long-run adjustments of firms and workers.Citation
Jia, Ruixue, Xiao Ma, and Victoria Wenxin Xie. 2026. "Expecting Floods: Firm Entry, Employment, and Aggregate Implications." òòò½Íø Journal: Macroeconomics 18 (3): 42–76. DOI: 10.1257/mac.20230356Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- E23 Macroeconomics: Production
- E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
- L11 Production, Pricing, and Market Structure; Size Distribution of Firms
- Q54 Climate; Natural Disasters and Their Management; Global Warming
- R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
- R32 Other Spatial Production and Pricing Analysis