TY  - BOOK
AU  - Jia,Ruixue
AU  - Ma,Xiao
AU  - Xie,Victoria Wenxin
ED  - National Bureau of Economic Research.
TI  - Expecting Floods: Firm Entry, Employment, and Aggregate Implications 
T2  - NBER working paper series
PY  - 2022///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
KW  - Environment
KW  - jelc
KW  - Climate • Natural Disasters and Their Management • Global Warming
KW  - Environment and Development • Environment and Trade • Sustainability • Environmental Accounts and Accounting • Environmental Equity • Population Growth
KW  - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
KW  - General Equilibrium and Welfare Economic Analysis of Regional Economies
N1  - July 2022; Hardcopy version available to institutional subscribers
N2  - Flood events and flood risk have been increasing in the past few decades and have important consequences for the economy. Using county-level and ZIP-code-level data from the United States during 1998-2018, we document that (1) increased flood risk has a large negative impact on firm entry, employment, and output in the long run; and (2) flood events reduce output in the short run while their impact on firm entry and employment is limited. Motivated by these findings, we construct a spatial equilibrium model to characterize how flood risk shapes firms' location choices and workers' employment, which we use to estimate the aggregate impact of increased flood risk on the economy. We find that flood risk reduced U.S. aggregate output by 0.52% in 2018, 80% of which stemmed from expectation effects and 20% from direct damages. We also apply our model to study the distributional consequences and forecast the impact of future changes in flood risk. Our results highlight the importance of considering the adjustment of firms and workers in response to risk in evaluating the consequences of natural disasters
UR  - https://www.nber.org/papers/w30250
UR  - http://dx.doi.org/10.3386/w30250
ER  -