Flood Inundation, Migration Localization and Insurance Adjustment

Abstract: Do floods drive residential exit, and how does local flood insurance protection adjust in their aftermath? Combining annual block-group migration flows, satellite-measured inundation, and National Flood Insurance Program (NFIP) policy microdata for 2011–2019, I compare inundated and non-inundated block groups within the same affected county and flood event. I find little evidence of broad residential exit following inundation. Instead, flooding changes the geographic composition of arrivals: the out-of-state share of in-migrants falls by 0.34 percentage points, while the ratio of out-of-state to within-county arrivals declines by 2.6 percent. Local NFIP protection adjusts along two margins. Active insured unit density declines after inundation, while the probability that a block group has any active NFIP participation shows only a modest increase. These findings show that post-flood adjustment is not characterized by widespread exit or uniform insurance withdrawal. Rather, flooding localizes migration and reduces local NFIP policy intensity especially after spatially extensive inundation.

Climate Shocks, Debt Defaults, and Investment in Climate Adaptation - Squaring an Impossible Trilemma. (with Constance de Soyres and Joanne Tan)

Abstract: Climate disasters tend to be associated with increased sovereign default risk. Countries face an “impossible trilemma”: scale up adaptation investment, keep debt sustainable amidst high borrowing costs and avoid the higher risk of default from delayed adaptation. Using a global panel of disaster event-level shocks, we find that a 1 percentage point increase in disaster related losses as a share of GDP raises the odds of sovereign default by approximately 2–3 percent. An additional US$1 billion in cumulative Official Development Assistance (ODA) is associated with a 0.13 point gain in a country’s adaptive capacity. Using average marginal effects and our predicted margins we then map concessional ODA finance to default probability and translate these relationships into a practical budgeting yardstick for calibrating needed ODA to sovereign default risk reduction targets. In a context of declining ODA, our findings highlight the crucial role of well-designed support in climate adaptation policies.