Impacts of Typhoons on Local Labor Markets based on GMM: An Empirical Study of Guangdong Province, China

Abstract

Abstract What impacts do typhoons have on local labor markets? Few empirical researches have been conducted in China. By collecting the data of 23 quarters (3-month intervals) of Guangdong province from 2009 to 2014 and using the generalized method of moments (GMM), this paper analyzes the impacts of typhoons on labor markets from the perspectives of general effect, regional effect, intensity effect, and time effect. In addition, a comparative analysis is carried out between this study and similar studies of developed countries. The results show that 1) massive typhoons resulted in a 12.5% increase in employment but did not have a significant impact on Guangdong’s per capita employee remuneration, and 2) there are periodic features to typhoons’ impacts on employment. Typhoons influence employment in a four-quarter cycle. In the quarter affected by a typhoon, the first quarter, the number of employees increased by 17.4%. The quantity of labor employed in the subsequent two quarters shows no significant change. In the last quarter, the number of employed people decreases by 17.0%, which returns to predisaster levels. Additionally, 3) the results of this study are different from those of studies involving developed countries, which may be caused by the distinctiveness of China’s labor market. Finally, conclusions and corresponding suggestions are presented.