Shaking Up the Equilibrium: Natural Disasters, Economic Activity, and Immigration

Abstract

This paper examines the long-run e↵ects on the spatial distribution of economic activity caused by historical shocks. Using variation in the potential damage intensity of the 1906 San Francisco Earthquake across cities in the American West, we show that more severely a↵ected cities experienced lower population growth relative to less a↵ected cities after the earthquake. This negative e↵ect persisted until the late 20th century. The earthquake diverted migrants to less a↵ected areas in the region, which, together with reinforcing dynamic agglomeration e↵ects from scale economies, left a long-lasting mark on the location of economic activity in the American West.

Pandemics, Places, and Populations: Evidence from the Black Death

“…Famines, as studied by Meng et al (2015), killed large numbers of people but the poor died at higher rates. Disasters such as earthquakes and fires, as studied by Hornbeck and Keniston (2017) and Ager et al (2018), tend to kill far less people but also lead to massive physical destruction. Expulsions, as studied by Waldinger (2010Waldinger ( , 2012, Chaney and Hornbeck (2015), and Johnson and Koyama (2017) targeted specific subpopulations.…”