Natural disasters are some of the most traumatic and extreme shocks that can hit families. This paper studies the long-term impact of experiencing an extreme natural disaster during childhood on individuals’ mental health and human capital accumulation, for over 3 generations. In a border design study, this study leverages the February 1, 1953 flood in the Netherlands that was hyper-local in nature. We use high-quality Dutch registry data, and focus individuals aged 0-18 at the time of the flood (birth cohorts 1935-1952), their children, and their grandchildren.
For the first generation, i.e. those aged 0-18 year old at the time of the flood, we find a substantial adverse impact of the shock on socioeconomic outcomes and mental health among people in flooded towns compared to people in dry towns up to 70 years later. Moreover, we find that the mental health and human capital of their children and grandchildren is also adversely affected, causing long-term and persistent economic disadvantage among affected families. Joint work with Gordon B. Dahl (UCSD, United States)