Skip to main content
SpringerLink
Log in

Employment and self-employment in the wake of Hurricane Katrina

  • Published:
Demography

Abstract

We use data from the monthly Current Population Survey to examine the short- and longer-term effects of Hurricane Katrina on the labor market outcomes of prime-age individuals in the most affected states—Alabama, Florida, Louisiana, and Mississippi— and for evacuees in any state. We focus on rates of labor force participation, employment, and unemployment, and we extend prior research by also examining rates of self-employment. With the exception of Mississippi, employment and unemployment one year after the hurricane were at similar rates as the end of 2003. This aggregate pattern of labor market shock and recovery has been observed for other disasters but masks important differences among subgroups. Those evacuated from their residences, even temporarily, were a harder-hit group, and evacuees who had yet to return to their pre-Katrina state up to one year later were hit especially hard; these findings hold even after controlling for differences in observable characteristics. We also find evidence of an important role for self-employment as part of post-disaster labor market recovery, especially for evacuees who did not return. This may result from poor job prospects in the wage and salary sector or new opportunities for starting businesses in the wake of Katrina.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Alesch, D.J. 2003. “Complex Urban Systems and Extreme Events: Toward a Theory of Disaster Recovery.” Article, Fairfax, VA: Public Entity Risk Institute.

    Google Scholar 

  • Alesch, D.J., J.N. Holly, E. Mittler, and R. Nagy. 2001a. “When Small Businesses and Not-for-Profit Organizations Collide With Environmental Disasters.” Paper presented at The First Annual IIASA-DPRI Meeting Integrated Disaster Risk Management: Reducing Socio-Economic Vulnerability, IIASA, Laxenburg, Austria.

  • -. 2001b. “Organizations at Risk: What Happens When Small Businesses and Not-for-Profits Encounter Natural Disasters.” Technical report. Public Entity Risk Institute, Fairfax, VA.

  • Blanchflower, D.G. 2000. “Self-employment in OECD Countries.” Labour Economics 7: 471–506.

    Article  Google Scholar 

  • Blanchflower, D.G. and A.J. Oswald. 1998. “What Makes an Entrepreneur?” Journal of Labor Economics 7: 471–506.

    Google Scholar 

  • Brown, S.P., S.L. Mason, and R.B. Tiller. 2006. “The Effect of Hurricane Katrina on Employment and Unemployment.” Monthly Labor Review 129(8): 52–69.

    Google Scholar 

  • Cahoon, L.S., D.E. Herz, R.C. Ning, A.E. Polivka, M.E. Reed, E.L. Robison, and G.D. Weyland. 2006. “The Current Population Survey Response to Hurricane Katrina.” Monthly Labor Review 129(8): 40–51.

    Google Scholar 

  • Clayton, R.L. and J.R. Spletzer. 2006. “Working Mobility Before and After Hurricane Katrina.” Monthly Labor Review 129(8): 11–21.

    Google Scholar 

  • Cutter, S.L., C.T. Emrich, J.T. Mitchell, B.J. Boruff, M. Gall, M.C. Schmidtlein, C.G. Burton, and G. Melton. 2006. “The Long Road Home: Race, Class, and Recovery From Hurricane Katrina.” Environment 48(2): 8–20.

    Google Scholar 

  • Dixon, L., J.W. Macdonald, and J. Zissimopoulos. 2007. “Commercial Wind Insurance in the Gulf States: Developments Since Hurricane Katrina and Challenges Moving Forward.” RAND Occasional Paper OP-190-ICJ. RAND Corporation, Santa Monica, CA.

  • Elliott, J.R. and J. Pais. 2006. “Race, Class, and Hurricane Katrina: Social Differences in Human Response to Disaster.” Social Science Research 35: 295–321.

    Article  Google Scholar 

  • Ewing, B.T. and J.B. Kruse. 2005. “Hurricanes and Unemployment.” Working paper, The Center for Natural Hazards Research, East Carolina University.

  • Ewing, B.T., J.B. Kruse, and M.A. Thompson. 2003a. “A Comparison of Employment Growth and Stability Before and After the Fort Worth Tornado.” Environmental Hazards 5: 83–91.

    Article  Google Scholar 

  • —. 2003b. “Employment Dynamics and the Nashville Tornado.” Journal of Regional Analysis and Policy 34: 47–60.

    Google Scholar 

  • -. 2004. “An Empirical Examination of the Corpus Christi Unemployment Rate and Hurricane Bret.” Working paper. The Center for Natural Hazards Research, East Carolina University.

  • —. 2009. “Twister! Employment Responses to the 3 May 1999 Oklahoma City Tornado.” Applied Economics 41: 691–702.

    Article  Google Scholar 

  • Frankenberg, E., D. McKee, and D. Thomas. 2005. “Health Consequences of Forest Fires in Indonesia.” Demography 42: 109–29.

    Article  Google Scholar 

  • Frey, W.H. and A. Singer. 2006. Katrina and Rita Impacts on Gulf Coast Populations: First Census Findings. Washington, DC: Brookings Institution.

    Google Scholar 

  • Garber, M., L. Unger, J. White, and L. Wohlford. 2006. “Hurricane Katrina’s Effects on Industry Employment.” Monthly Labor Review 129(8): 22–39.

    Google Scholar 

  • Groen, J.A. and A.E. Polivka. 2008a. “The Effect of Hurricane Katrina on the Labor Market Outcomes of Evacuees.” American Economic Review Papers and Proceedings 98(2): 43–48.

    Article  Google Scholar 

  • —. 2008b. “Hurricane Katrina Evacuees: Who They Are, Where They Are, and How They Are Faring.” Monthly Labor Review 131(3): 32–51.

    Google Scholar 

  • -. 2009. “Going Home After Hurricane Katrina: Determinants of Return Migration and Changes in Affected Areas.” BLS Working Paper No. 428. Bureau of Labor Statistics, Washington, DC.

  • Guimaraes, P., F.L. Hefner, and D.P. Woodward. 1993. “Wealth and Income Effects of Natural Disasters: An Econometric Analysis of Hurricane Hugo.” Review of Regional Studies 23: 97–114.

    Google Scholar 

  • Kosanovich, K. 2006. “The Labor Market Impact of Hurricane Katrina: An Overview.” Monthly Labor Review 129(8): 3–10.

    Google Scholar 

  • Kroll, C.A., J.D. Landis, Q. Shen, and S. Stryker. 1991. “Economic Impacts of the Loma Prieta Earthquake: A Focus on Small Business.” Studies on the Loma Prieta Earthquake No. 3. The University of California Transportation Center, University of California, Berkeley.

  • Manser, M.E. and G. Picot. 1999. “The Role of Self-employment in U.S. and Canadian Job Growth.” Monthly Labor Review 122(4): 10–25.

    Google Scholar 

  • Moore, C.S. and R.E. Mueller. 2002. “The Transition From Paid to Self-employment in Canada: The Importance of Push Factors.” Applied Economics 34: 791–801.

    Article  Google Scholar 

  • Pielke, R.A. Jr., J. Gratz, C.W. Landsea, D. Collins, M.A. Saunders, and R. Musulin. 2008. “Normalized Hurricane Damages in the United States: 1900–2005.” Natural Hazards Review 9(1): 29–42.

    Article  Google Scholar 

  • Rodgers, J.L., C.A. St. John, and R. Coleman. 2005. “Did Fertility Go up After the Oklahoma City Bombing? An Analysis of Births in Metropolitan Counties in Oklahoma, 1990–1999.” Demography 42: 675–92.

    Article  Google Scholar 

  • Rodriguez, H., E.L. Quarantelli, and R. Dynes, eds. 2006. Handbook of Disaster Research. New York: Springer.

    Google Scholar 

  • Sastry, N. 2002. “Forest Fires, Air Pollution, and Mortality in Southeast Asia.” Demography 39: 1–23.

    Article  Google Scholar 

  • —. 2009. “Tracing the Effects of Hurricane Katrina on the Population of New Orleans: The Displaced New Orleans Residents Pilot Study.” Sociological Methods and Research 38: 171–96.

    Article  Google Scholar 

  • Schuetze, H.J. 2000. “Taxes, Economic Conditions and Recent Trends in Self-employment: A Canada-U.S. Comparison.” Labour Economics 7: 507–44.

    Article  Google Scholar 

  • Schuster, M.A., B.D. Stein, L.H. Jaycox, R.L. Collins, G.N. Marshall, M.N. Elliott, A.J. Zhou, D.E. Kanouse, J.L. Morrison, and S.H. Berry. 2001. “ANational Survey of Stress Reactions After the September 11, 2001, Terrorist Attacks.” New England Journal of Medicine 345: 1507–12.

    Article  Google Scholar 

  • Simpson, W. and R. Sproule. 1998. “Econometric Analysis of Canadian Self-employment Using SLID.” Income and Labour Dynamics Working Paper No. 98-16. Statistics Canada, November.

  • Skidmore, M. and H. Toya. 2002. “Do Natural Disasters Promote Long Run Growth?” Economic Inquiry 40: 664–87.

    Article  Google Scholar 

  • Smith, S.K. and C. McCarty. 1996. “Demographic Effects of Natural Disasters: A Case Study of Hurricane Andrew.” Demography 33: 265–75.

    Article  Google Scholar 

  • Tierney, K.J. 2003. “Conceptualizing and Measuring Organizational and Community Resilience: Lessons From the Emergency Response Following the September 11, 2001 Attack on the World Trade Center.” Preliminary Paper No. 329. University of Delaware Disaster Research Center, Newark, DE.

  • Tierney, K.J. and M. Bruneau. 2007. “Conceptualizing and Measuring Resilience: A Key to Disaster Loss Reduction.” TR News 250(May–June): 14–17.

    Google Scholar 

  • U.S. Department of Commerce, NOAA Satellite and Information Service. 2006. “Climate of 2005 Atlantic Hurricane Season.” Available online at http://www.ncdc.noaa.gov/oa/climate/ research/2005/hurricanes05.html.

  • Vigdor, J.L. 2007. “The Katrina Effect: Was There a Bright Side to the Evacuation of Greater New Orleans?” The B.E. Journal of Economic Analysis and Policy (Advances) 7(1): Article 64. Available online at: http://www.bepress.com/bejeap/vol7/iss1/art64.

  • Webb, G.R., K.J. Tierney, and J.M. Dahlhamer. 2000. “Business and Disasters: Empirical Patterns and Unanswered Questions.” Natural Hazards Review 1(2): 83–90.

    Article  Google Scholar 

  • —. 2002. “Predicting Long-term Business Recovery From Disaster: A Comparison of the Loma Prieta Earthquake and Hurricane Andrew.” Environmental Hazards 4: 45–58.

    Article  Google Scholar 

  • Wright, J.D. and P.H. Rossi, eds. 1981. Social Science and Natural Hazards. Cambridge, MA: Abt Books.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. RAND Corporation, 1776 Main Street, P.O. Box 2138, 90407, Santa Monica, CA

    Julie Zissimopoulos & Lynn A. Karoly

Authors
  1. Julie Zissimopoulos
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Lynn A. Karoly
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Julie Zissimopoulos.

Additional information

This paper results from the RAND Corporation’s continuing program of self-initiated research.

Support for such research is provided, in part, by the generosity of RAND’s donors and by the fees earned on client-funded research.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Zissimopoulos, J., Karoly, L.A. Employment and self-employment in the wake of Hurricane Katrina. Demography 47, 345–367 (2010). https://doi.org/10.1353/dem.0.0099

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1353/dem.0.0099

Keywords

Search

Navigation