The Economic Impact of Migrants from Hurricane Maria

Abstract:

On September 22nd, 2017 Hurricane Maria struck Puerto Rico, bringing devastation on a scale rarely seen before. Most of the island was left without basic infrastructure such as electricity and running water. Large parts of the housing stock suffered catastrophic damage, and hundreds of thousands of families suffered major losses in property and lives. In the months following the hurricane, the response from FEMA was slow, and reconstruction and restoration of power, electricity and road connections lagged. Struggling to see various basic needs met, several individuals and families left Puerto Rico for the U.S. mainland. Estimates suggest that between September 2017 and March 2018, over 120,000 people fled from Puerto Rico to the mainland. This paper examines the local economic impact of this sudden migration event in Orlando,the city which received a large plurality of these refugees.

Our results admit a story in which this migration event yielded concurrent, large labor supply and consumer demand shocks on the local economy which received the migrants. Orlando's construction sector, in particular, was exposed to the labor supply shock, while the retail and accommodation & food services portions of the Orlando economy were exposed to the consumer demand shock. The new workers were fully absorbed by the local economy without displacing any native workers and without any overall negative effect on earnings, though there was some downward pressure on construction earnings for natives, specifically. However, native retail employment and earnings were both positively impacted, such that the overall effect on natives was to increase their employment without any clear impact on earnings.

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Justin Wiltshire
Ph.D. Student, Economics
Justin Wiltshire is a Ph.D. Candidate in the Department of Economics at the University of California, Davis. His research explores urban and regional decline and revitalization in the developed world, with a focus on the relationships among local industrial composition, labour market outcomes, and population demographics. He has worked as an economist in the British Civil Service, and has contributed to a publication for This American Life.

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