The effect of the l’Aquila earthquake on labour market outcomes

Using Labour Force Survey individual-level data recently released by the Italian Institute of Statistics (ISTAT) where information is for the first time at available at provincial level, this paper looks at the short-term effects of the L’Aquila earthquake on labour market outcomes. Our estimates are based on a difference-in-differences (DiD) strategy that compares residents of L’Aquila with residents of a control area before and after the earthquake. The empirical results suggest that while the earthquake had no significant effect on the employment-population ratio, it led to a modest, but significant, reduction in labour force participation. There is also evidence of significant heterogeneous effects by gender and level of education.