The Effects of Large Wildfires on Employment and Wage Growth and Volatility in the Western United States

Abstract

We examined the effect of large wildfires on economic growth and volatility in the western United States. We matched wildfire data with quarterly employment and earnings growth data to assess the specific effect of wildfire on employment and wage growth in western US counties. Wildfires generally tended to exhibit positive effects on employment and wage growth in the quarter(s) during which suppression efforts were active. However, this effect transitioned to increased economic volatility following a wildfire. The effect of wildfire also varied by the type of county in which wildfire occurred. The amount of suppression costs invested locally had the strongest influence on employment growth, indicating that there may be room for augmenting how local economies experience wildfire either through the development of community capacity or by addressing barriers to local spending in federal wildfire policy.