The Economic Effects of Hurricane Disasters: Firm Behavior in the U.S.

Natural disasters can cause severe disruptions to local economies by damaging infrastructure, displacing workers, and affecting firm behavior. This paper estimates the causal effect of hurricane exposure on firm dynamics and labor market outcomes across U.S. counties using quarterly data from 2014 to 2022. By combining NOAA Storm Events data with the Quarterly Census of Employment and Wages, the analysis examines how hurricane shocks affect firm entry and exit decisions as well as county-level wage trends. Using a county–quarter fixed-effects panel framework, the empirical strategy exploits within-county variation in hurricane exposure over time to identify both the immediate and lagged effects of hurricane shocks while controlling for persistent regional differences. The results contribute to a better understanding of how natural disasters shape firm dynamics and local labor outcomes and provide insights for policymakers designing disaster recovery and adaptation strategies that support firm continuity and workers.