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The effect of natural disasters on human capital in the United States

Nature Human Behaviour volume 7, pages 1442–1453 (2023)Cite this article

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Abstract

Although natural disasters are commonplace, they leave in their wake an enormous amount of damage. The physical damage they cause is immediately apparent, but less obvious is the potential magnitude of disruptions to learning and resulting damage to human capital. Using the universe of Presidential Disaster Declarations in the United States, we show that natural disasters impact a region’s human capital both via reductions in learning for students who remain in school as well as a reduction in the years of schooling completed. These effects appear to be scarring and persistent. Quantifying these losses using the implied reduction of lifetime earnings suggests that natural disasters reduce a region’s human capital by a similar magnitude as the assessed property damage.

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Fig. 1: Frequency of disasters by county for the period 1990–2018.
Fig. 2: Disaster frequency by category over time.
Fig. 3: Impact of disasters on educational achievement and attainment.
Fig. 4: Costs of damages to human and physical capital of different sized disasters.

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Data availability

The data on education achievement and attainment are publicly available. We obtained the SEDA, IPEDS and EDFacts data through the Urban Institute’s Education Data Explorer at https://educationdata.urban.org/data-explorer. The migration data are publicly available and can be found at https://www.irs.gov/statistics/soi-tax-stats-migration-data. Finally, the SHELDUS data can be found at https://cemhs.asu.edu/sheldus.

Code availability

The code used is available at github.com/isaacopper/NaturalDisastersAndHumanCapital.

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Acknowledgements

We thank J. Wenger, A. Strong, P. Hunt, A. P. Behrer and J. Coe with whom we had many fruitful conversations about how to better understand the impact of natural disasters on a range of economic outcomes and C. Mulhern and K. G. Carmen for feedback on early versions of this paper. I.M.O. thanks the Disaster Management and Resilience programme of RAND’s Homeland Security Research Division and RAND’s Education and Labor Division for their continual support and encouragement. The authors received no specific funding for this work.

Author information

Authors and Affiliations

  1. RAND Corporation, Santa Monica, CA, USA

    Isaac M. Opper

  2. School of Social Policy and Practice and Wharton School of Business, University of Pennsylvania, Philadelphia, PA, USA

    R. Jisung Park

  3. Amazon, Washington, DC, USA

    Lucas Husted

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All three authors contributed in some way to all aspects of the paper, from conceptualization to data analysis to writing.

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Correspondence to Isaac M. Opper.

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Nature Human Behaviour thanks Harsh Parikh, Christopher Timmins and Haizheng Li for their contribution to the peer review of this work. Peer reviewer reports are available.

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Extended data

Extended Data Fig. 1 Outcome distributions across the four measures of human capital.

The figure shows the histograms for the four main outcomes. (a) Net migration rates; (b) Change in average student test scores; (c) Change in high school graduation rates; (d) Change in log post-secondary attendance.

Extended Data Fig. 2 Type of disaster distribution by disaster size.

This figure illustrates how many disasters of a given category were classified as a particular disaster type by SHELDUS. ‘Small Disaster’ consist of counties with per capita property damage of $1-$10 per capita in a year; ‘Medium Disaster’ have per capita property damage of $10- $100; ‘Large Disaster’ have per capita property damage of $100-$500, and ‘Very Large Disaster’ have more than $500 per capita property damage.

Extended Data Table 1 Relationship between disaster size and change in human capital components
Full size table
Extended Data Table 2 Impact of disasters on average test scores
Full size table
Extended Data Table 3 Impact of disasters on net migration rates
Full size table
Extended Data Table 4 Impact of disasters on post-secondary attendance
Full size table
Extended Data Table 5 Impact of disasters on high school graduation rates
Full size table
Extended Data Table 6 Monetized human capital damages due to natural disasters
Full size table

Supplementary information

Supplementary Information

Supplementary Discussion, Figs. 1–10 and Tables 1–6.

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Peer Review File

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Opper, I.M., Park, R.J. & Husted, L. The effect of natural disasters on human capital in the United States. Nat Hum Behav 7, 1442–1453 (2023). https://doi.org/10.1038/s41562-023-01610-z

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