Document Type

Honors Capstone Project

Date of Submission

Spring 5-1-2013

Capstone Advisor

Professor Perry Singleton

Honors Reader

Professor Jeffrey Weinstein

Capstone Major

Economics

Capstone College

Arts and Science

Audio/Visual Component

no

Capstone Prize Winner

no

Won Capstone Funding

no

Honors Categories

Social Sciences

Subject Categories

Economics | Labor Economics

Abstract

The objective of this paper is to use the mass migration toHoustonafter Hurricane Katrina as a natural experiment to estimate the effect of migration on employment (i.e., the effects of being an outsider rather than a native to a certain area). The use of this natural experiment helps control for the usual endogeneity of studying effects of immigration; it is safe to assume away the possibility that the migration was mainly because of higher wages or better employment opportunities, a possibility present in most empirical studies on the subject, which makes it hard to say how the actual migration itself affects employment In addition, this paper explores how these effects differ for whites and nonwhites, as evidence of discrimination in the labor market. I utilize linear probability models for the likelihood of employment, labor force participation, and unemployment based on whether or not the individual was an evacuee from Hurricane Katrina (controlling for other observable characteristics). I find evidence that the migration increased the likelihood of unemployment inHoustonby 6.6 percentage points. When broken down by race, I find that, while the estimation results for white evacuees are not statistically significant, there is strong evidence supporting the idea that nonwhite evacuees were more adversely affected by the migration, having experienced an increase in the probability of unemployment by 12.2 percentage points. This difference is suggestive of statistical discrimination inHouston’s labor market in the years immediately following Hurricane Katrina.

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

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