The economics of natural disasters: Evidence from riverine floodings in Austria

Commissioned by: Ministry of Science, Education and Youth
Project duration: January 13, 2026 - October 31, 2027
Project managers: Ivan Žilić (Croatian team) / Alexander Ahammer (Austrian team)
Collaborators: Croatian research team: Lea-Karla Matić / Austrian research team: Flora Stiftinger

Summary: 
Floods are among the most frequent and costly climate-related disasters in Europe, and climate change is expected to increase their frequency and severity. Despite this, there is limited evidence on how floods shape individuals’ employment and health trajectories, and how firms in exposed regions adjust. This project provides new causal evidence using linked administrative data from Austria (1972-2024), combining comprehensive employment histories with detailed healthcare utilization records. We estimate the short- and long-run impacts of major flood events on labor market outcomes (employment, earnings, unemployment and disability claims, training) and health outcomes (sick leave, hospital admissions, outpatient care, prescriptions), alongside firm outcomes (survival, employment, wage bills). Identification relies on spatial discontinuities around major river corridors and detailed flood mapping, complemented by event-study analysis. The findings will support evidence-based preparedness and recovery policies, including better targeting of assistance to affected households and firms, anticipating labor market disruptions, and planning for health-system pressures.
 

RESEARCH AREA: Economics and the environment, Health and well-being, Labor market and competencies