The effects of major earthquakes on the labor market: evidence from Turkey

Abstract

PurposeThe purpose of this paper is to explore the impact of earthquakes on the labor market. The authors try to estimate the impact of two major earthquakes (Izmir and Elazig) in Turkey.Design/methodology/approachIn order to analyze the effects of devastating earthquakes in the nearby regions of the province where the earthquake took place, on the labor market, monthly and annual data from the TUIK and ISKUR database will be used. For this purpose, the authors consider the earthquake a natural experiment and employ a Synthetic Control Method (SCM). In addition, the analysis will be carried out using seasonally adjusted data, taking into account the seasonal effects of the monthly data to be used in the study.FindingsThe results show that the impact varies based on the labor market structure of the regions. While the earthquake positively affects the labor market of agriculture-oriented regions, it harms the labor market of nonagricultural-oriented regions.Research limitations/implicationsA major limitation of the study is that we cannot fully separate the impact of Covid-19 from our estimate. The authors believe that Covid-19 overestimates the negative impact of earthquakes on the labor market.Social implicationsEarthquakes have adverse effects on the labor market. The estimation of the earthquake-related costs may provide a useful guide on policy planning and government incentives.Originality/valueThe originality of the study lies in the fact that this is the first study to evaluate how the dynamics of the labor market has changed as a result of the earthquakes that have taken place in Turkey, within the framework of causality.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-08-2022-0568