Bureau of Labor Statistics 1 Using Wage Records to Study the Impact of Hurricane Katrina Richard L....

Bureau of Labor Statistics

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Using Wage Records to Study the Impact of Hurricane Katrina

Richard L. ClaytonJames R. Spletzer


May 24, 2006LMI Conference, St. Louis


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Outline of Today’s Presentation

Brief overview of Hurricane Katrina

Our data and methodology

The effects of Hurricane Katrina using Louisiana and Texas wage records


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Hurricane Katrina: Tuesday 8/23/05


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Hurricane Katrina: Wednesday 8/24/05


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Hurricane Katrina: Thursday 8/25/05


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Hurricane Katrina: Friday 8/26/05


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Hurricane Katrina: Saturday 8/27/05


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Hurricane Katrina: Sunday 8/28/05


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Hurricane Katrina

New Orleans Times Picayune August 29, 30, & 31


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Hurricane Katrina

The States and the BLS have done a lot to measure the impact of Hurricane Katrina on labor market outcomes

Today’s presentation – what can wage records tell us about the labor market impacts of Hurricane Katrina?


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Data and Methodology

We obtained wage records from:

Louisiana, 2004:Q1 – 2005:Q3

(2005:Q4 forthcoming)

Texas, 2004:Q1 – 2005:Q4

We enhanced the wage records by merging in Quarterly Census of Employment and

Wages (QCEW) data


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Our methodology:

> Look at quarterly transitions, within and across states

> Compare 2005 transitions to 2004 transitions

For example: look at number of persons who move from New Orleans to Texas in both 2004 and 2005


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Issues when using WRs for analysis:

Transitions can not be timed within quarters

Wage records only record employment, not unemployment or out of the labor force

Wage records are filed for the UI account, not for the specific establishment


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For Louisiana (using WR & QCEW data)

62% of employment is in single establishments

11% of employment is in multi-establishment employers with all establishments in the same MSA (8 MSAs + BoS in Louisiana)

27% of employment is in multi-establishment employers with establishments in multiple counties


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Number of Wage Records

Texas New Orleans MSA

10,250,000

10,500,000

10,750,000

11,000,000

11,250,000

Q1 Q2 Q3 Q4

Texas 2004 Texas 2005

325,000

375,000

425,000

475,000

525,000

Q1 Q2 Q3 Q4

New Orleans MSA 2004 New Orleans MSA 2005


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370,000

375,000

380,000

385,000

390,000

Q1 Q2 Q3 Q4

Texas 2004 Texas 2005

15,000

20,000

25,000

30,000

Q1 Q2 Q3 Q4

New Orleans MSA 2004 New Orleans MSA 2005

Number of UI Accounts with WRs

Texas New Orleans MSA


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The Effects of Hurricane Katrina

# Wage Records and # UI Accounts

Substantial decline in # wage records and # UI accounts in Louisiana in 2005:Q3

Percentage decline is 2½ times larger in New Orleans MSA than in Louisiana

No similar decline in Louisiana in 2004:Q3

No similar decline in Texas in 2005:Q3


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# Wage Records and # UI Accounts

Need to ask: Is the substantial decline an economic effect, or is it due to administrative data reporting?

Updated 2005:Q3 Louisiana wage records will incorporate data for late reporters, and thus mitigate administrative reporting issues


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Cross-State Mobility

Texas to Louisiana New Orleans to Texas

7,000

8,000

9,000

10,000

Q1 - Q2 Q2 - Q3 Q3 - Q4

Newly Employed in Louisiana (from Texas), 2004

Newly Employed in Louisiana (from Texas), 2005

0

2,000

4,000

6,000

8,000

Q1 - Q2 Q2 - Q3 Q3 - Q4

New ly Employed in Texas (from New Orleans MSA), 2004

New ly Employed in Texas (from New Orleans MSA), 2005


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Cross-State Mobility

Substantial increase in number of persons newly employed in Texas in 2005:Q3 > conditional on working in Louisiana in 2005:Q2 > conditional on not working in Texas in 2005:Q2

Even larger increase in number of persons newly employed in Texas in 2005:Q4

No similar increases in 2004, nor in cross-state mobility the other direction


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Focus on 2 samples of cross-state mobility:

N=1,608 persons moving from New Orleans MSA to Texas in 2004:Q3 (voluntary movers)

N=5,648 persons moving from New Orleans MSA to Texas in 2005:Q3 (voluntary movers + displaced movers)

Are these 2 samples different?> A rough estimate of displacement effects


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Cross State MobilityNew Orleans MSA to Texas

2004 Q2-Q3 2005 Q2-Q3

Stay within same EIN 15% 12%

Stay within same Industry 38% 39%

Q2 Earnings (all jobs) 6,664 5,859

Q3 Earnings (all jobs) 8,414 5,305

Q2-Q3 Earnings Gain 1,750 -553


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Cross-State Mobility: Pre and Post Katrina

Persons who moved from New Orleans MSA to Texas in 2004:Q3 (all pre-Katrina) gained, on average, $1750 in quarterly earnings

Persons who moved from New Orleans MSA to Texas in 2005:Q3 (some post-Katrina) lost, on average, $553 in quarterly earnings

Results consistent with “Displacement”


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Summary: specific findings

We have used 2004 & 2005 wage records (enhanced with QCEW) from LA & TX to study the effects of Hurricane Katrina

> Many striking employment and wage effects

> Much more empirical work to do

We regard our results as preliminary until the 2005:Q4 and the updated 2005:Q3 Louisiana wage records become available


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Summary: general findings

The methodology we have used could be applied to analyzing any large displacement

> Plant closing

> Other natural disasters

Bureau of Labor Statistics 1 Using Wage Records to Study the Impact of Hurricane Katrina Richard L....

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