Wildfires Boost Construction Jobs, Temporarily Disrupt Local Economies
The Camp Fire, which devastated Paradise, California in 2018, was the deadliest and most destructive wildfire in US history. This tragedy, along with an increase in wildfire frequency and severity, has sparked research into their economic impacts. A recent study by Margaret Walls and Matthew Wibbenmeyer explores how these fires affect employment growth in nearby communities.
Wildfires, accounting for just 6 percent of billion-dollar disasters since 1980, have been growing in frequency and severity. Eight of the top 10 costliest fires, measured by insured losses, have occurred since 2017. The Camp Fire in 2018, which killed 85 people and destroyed over 18,000 structures in Paradise, California, is a stark example of this trend.
The study found that while wildfires cause a small boost of 0.4 percent in average employment growth rate at the county level, they also lead to temporary business disruptions. In smaller geographic areas closer to fires, the employment growth rate falls by 1.3 percentage points in the year of the fire. However, both county and subcounty analyses show a boost in job growth in the construction industry after wildfires, as rebuilding efforts commence.
Wildfires, though accounting for a small percentage of billion-dollar disasters, are becoming more frequent and severe, with significant impacts on local economies. While they cause temporary disruptions, they also stimulate job growth in the construction industry during rebuilding efforts. Further research is needed to fully understand the long-term economic effects of these devastating events.
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