The effect of the L'Aquila earthquake on labour market outcomes

In this paper we analyse the effects of the L'Aquila earthquake on labour market outcomes for a period of fifteen months after its occurrence. Our estimates are based on a difference-in-differences strategy that compares residents of L'Aquila with residents of a control area before and after the earthquake. Three main results emerge from our empirical analysis: (1) the earthquake led to a modest, but significant, reduction in the probability of participating in the labour force for a period of nine months after the event; (2) while the employment likelihood decreased in the quarter immediately after the earthquake, it increased in the next four quarters; and (3) there is evidence of significant heterogeneous effects by gender and level of education.