Raul Silveira Neto (p), Carlos Góes, Mary Arends-Kuenning

Ivan De Menezes Cavalcanti

This paper examines the economic impacts of an urban disaster in the city of Maceió, Brazil triggered by industrial rock salt mining on firms and families. The disaster occurred in 2018 with the subsidence of the ground in some neighborhoods near the mining sites, located in the city of Maceió, capital of Alagoas, a northeastern state in Brazil. As a result, these neighborhoods had to be abandoned, with the relocation of businesses and families. The event can be considered the largest natural resource extraction disaster to occur in a Brazilian capital in the 21st century. Despite its relevance, however, its economic and welfare consequences have not yet been explored in the literature. The present study aims to fill this gap. Using a difference-in-differences approach and microdata, we first assess the short-term, micro-local impacts on employment in affected areas, drawing on annual employer-level data to capture labor market disruptions. We then analyze household-level data from low-income populations to explore how the disaster affected household labor market outcomes. Finally, we evaluate the broader economic consequences for the municipality by applying synthetic control methods to data from the Continuous National Household Sample Survey, constructing a counterfactual scenario to assess Maceió’s economic performance in the absence of the disaster. Our findings reveal significant labor market impacts and business disruptions in Maceió due to the disaster. Firms in affected areas experience a substantial decline in employment levels over time and a heightened risk of closure, particularly in directly impacted zones. Sectoral analysis shows that the service sector was the hardest hit, with reductions in both employment and business survival. While business closures in the industrial sector increased, employment levels remained stable. The agricultural sector shows no significant effects. Among low-income households, we found a significant reduction in income from work in larger households (with more than five members), while no substantial effects were observed in smaller households. Conversely, income and food expenditure increased after the disaster, likely due to support from disaster relief funds. Additionally, the likelihood of child labor decreased over time following the disaster shock. These findings offer key insights into the labor market effects of disasters, emphasizing the need for robust policy responses as climate change increases the likelihood of such events. The study highlights the importance of economic resilience planning and targeted policies for vulnerable urban areas.

Ivan De Menezes Cavalcanti (p)

Soojeong Kang

We investigate the link between acute air pollution exposure on short-run mortality rate in Italy, following an identification strategy that exploits daily variations in air pollution concentration caused by changes in daily wind direction.
Changes in local wind direction are a strong predictor of changes in local air pollution levels, given that air pollution is often transported long distances through the wind.
Also, in our instrumental variable strategy, wind direction shifts pollution levels but is unrelated to the individual's pollution avoidance behaviours and other unobserved determinants of mortality, keeping them fixed.
Our results represent the first application of this identification method to Italy, exploring the country's unique institutional and geographical characteristics and refined datasets.

Donguk Bae (p), Yuncheol Shin, Hwikwon Ahn, Donghwan Ahn, Kwansoo Kim, Soojeong Kang

Marco Modica

Climate resilience is essential to reduce heatwave damages, and to this end, the Korean government has been installing various heatwave response technologies such as rooftop and wall greening, cool roofs, cooling fogs, and pergolas. As heatwave adaptation technologies are a way to building climate resilience capacity to heatwave, it is important to evaluate the effectiveness of each technology by assessing its cost-effectiveness. However, there are relatively few studies that comprehensively evaluate the economic benefits and costs of each technology
Given this research gap, this paper estimates the degree of labor productivity losses due to heatwave using the panel dataset which contains weather variables such as daily temperature and relative humidity, wage, number of workers by industry, and the number of installations of heat mitigation technologies in each region. The economic benefits of heatwave response technologies are then measured by implementing a 2-step regression analysis: (i) the impact of heatwave response technologies on the Heatwave Resilience Index (HWRI) is estimated and (ii) the impact of HWRI on heatwave damages is estimated. In the estimation, we measure the sum of labor productivity losses and heat illness medical expenditures as the heatwave damages. Based on the estimated benefits and collected costs of the technologies, a BCR analysis is conducted to evaluate the economic benefits of heatwave response technologies.
The estimation results show that the loss of labor productivity in South Korea due to heatwave from 2016 to 2024 is about KRW 265.1 billion (USD 184 million), and it is 0.18% of total wage payments. In 2024, the BCR for cooling fogs technology is recovered to be 0.81, 1.68 for cool roofs technology, 2.63 for rooftop/wall greening technology, and 0.87 for pergolas technology, indicating that rooftop/wall greening technology reduced heatwave damages in the most effective way.
The contribution of this paper can be summarized as follows: (i) the originality of the panel dataset we constructed and (ii) a 2-step estimation strategy capable of incorporating both climate resilience index and adoption technologies when it comes to estimating the benefits of each technology in reducing damage costs related to heatwave. Our analysis is expected to provide a useful information to policy makers for cost-effective introduction of heatwave response technologies.

Marco Modica (p), Giulio Breglia, Davide Di Marcoberardino

Raul Silveira Neto

The resilience of Central European countries to recurrent floods has become a critical issue in recent years. This study evaluates the economic impact of repeated flood events in Central European regions between 2013 and 2018, examining key outcome variables. These disasters disrupted local economies with both short- and long-term consequences, yet the factors influencing resilience and recovery remain underexplored.
This paper employs counterfactual methods to estimate the causal effects of these floods by comparing affected regions to similar, unaffected areas. This approach isolates flood-related economic impacts from other confounding factors, offering insights into long-term recovery trajectories. The analysis focuses on Germany, Austria, Poland, the Czech Republic, and Slovakia, considering economic fluctuations over multiple years.
A key aspect of this study is to examine how emergency funds and national borders influence resilience, shaping recovery strategies and contributing to disparities in responses and economic outcomes.. Government interventions, such as EU and national emergency funds, disaster relief initiatives, and cross-border cooperation, may have influenced recovery outcomes. Given the transnational nature of these floods, it is essential to assess whether economic and policy responses of neighboring countries strengthened or weakened resilience.
Findings contribute to the broader discourse on economic resilience in the face of climate-induced disasters. Insights into recovery strategies and border effects have implications for policymakers, suggesting that future resilience efforts should enhance regional cooperation, improve disaster response mechanisms, and optimize emergency funding to mitigate long-term economic consequences.