Multigenerational Effects of a Natural Disaster
Abstract
Natural disasters are some of the most traumatic and extreme shocks that can hit families. An emerging literature documents that exposure to a natural disaster during childhood affects a variety of outcomes, including school completion, cognitive test scores, and future earnings. Despite the importance of mental health as an outcome of disasters, there is limited causal evidence, primarily due to the lack of mental health data.We study how the shock of an extreme natural disaster experienced during childhood impacts an individual’s mental health and human capital accumulation, and that of their children and grandchildren. Our study leverages the February 1, 1953 flood in the Netherlands, which hit the southwestern portion of the country due to an unusual combination of spring tides and a long and heavy northwesterly storm. The immediate trauma of the flood and the evacuation following the disaster may have caused PTSD with potential long-term mental health effects.
We use high-quality Dutch registry data for the entire population of the Netherlands. Our baseline sample includes everyone aged 0-18 at the time of the flood (birth cohorts 1935-1952), their children, and their grandchildren. To identify causal effects, we take advantage of the fact that the flooding was hyper-local. We find the flood had a substantial adverse impact on the people residing in the flooded area. The first generation (ages 0-18 by 1953) affected has lower educational attainment, less wealth, and is in worse (mental) health relative to those not affected. We find these adverse effects carry over up to three generations, negatively impacting children’s and grandchildren’s health and economic outcomes. All in all, our paper provides some of the first evidence that severe shocks experienced in youth have lasting effects on mental health outcomes, which persist up to 75 years after the shock and over three generations.