Expecting Floods: Firm Entry, Employment, and Aggregate Implications

Thu, 01 Jan 2026 00:00:00 +0000

This paper studies how the expectation of rising flood risk — distinct from realized flood events — reshapes where firms locate, where workers live and how much they work, and what this implies for U.S. aggregate output. The motivation is climate-driven: roughly 6 million Americans lived within a 100-year flood zone in 1998, rising to 13 million by 2018, and FEMA floodplains are projected to grow about 45% by century’s end. Prior work largely studied actual floods or housing-price effects; this is among the first to examine firm entry and employment responses to anticipated risk.

Xiao Ma | Macro Paper Warehouse

Expecting Floods: Firm Entry, Employment, and Aggregate Implications