The effect of natural disasters on human capital in the United States.

Although natural disasters are commonplace, they leave in their wake an enormous amount of damage. The physical damage they cause is immediately apparent, but less obvious is the potential magnitude of disruptions to learning and resulting damage to human capital. Using the universe of Presidential Disaster Declarations in the United States, we show that natural disasters impact a region's human capital both via reductions in learning for students who remain in school as well as a reduction in the years of schooling completed. These effects appear to be scarring and persistent. Quantifying these losses using the implied reduction of lifetime earnings suggests that natural disasters reduce a region's human capital by a similar magnitude as the assessed property damage.

Learning is inhibited by heat exposure, both internationally and within the United States.

Human capital generally, and cognitive skills specifically, play a crucial role in determining economic mobility and macroeconomic growth. While elevated temperatures have been shown to impair short-run cognitive performance, much less is known about whether heat exposure affects the rate of skill formation. We combine standardized achievement data for 58 countries and 12,000 US school districts with detailed weather and academic calendar information to show that the rate of learning decreases with an increase in the number of hot school days. These results provide evidence that climatic differences may contribute to differences in educational achievement both across countries and within countries by socioeconomic status and that may have important implications for the magnitude and functional form of climate damages in coupled human-natural systems.