AN EXAMINATION OF THE IMPACT OF GOVERNMENTAL DISASTER RELIEF INCENTIVES ON BUSINESS LOCATION AND EMPLOYMENT DECISIONS

Even before record-setting natural disasters this decade such as Hurricanes Katrina, Rita, and Ivan, the US was breaking records in terms of insured property losses due to disasters in the 1990s. Whether or not this increase is due to changes in weather patterns, the pattern of increasing economic costs due to disasters is unlikely to abate. Migration patterns in the US are such that much of the population growth is occurring in costal locations. To examine the impact of federal government relief assistance on local economies, this paper examines the role that Small Business Administration (SBA) disaster lending has on economic recovery. Data on disaster declarations and assistance from 1989 through 1999 come from the Department of Homeland Security's Federal Emergency Management Agency and disaster lending data come from the US SBA. Data on business establishments, employment, and payroll come from the Census Bureau's County Business Patterns.