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Hurricanes Katrina and Rita devastated the US Gulf Coast in 2005. We use job-level data to compare the evolution of earnings for affected workers in four states with workers from matched control counties. We attribute short-term earnings losses to job separations and long-term gains to wage growth in the affected areas. Wages rose due to reduced labor supply and increased labor demand in the affected labor markets. Damage to a worker’s residence or workplace accentuated short-term earnings losses. Effects varied by prestorm industry, with larger gains for workers in sectors related to rebuilding.
Groen et al. (Tue,) studied this question.