Doctoral thesis

Three essays in economics of catastrophes


118 p

Thèse de doctorat: Università della Svizzera italiana, 2018

English Many events can have a catastrophic effect on an economic environment, such as natural disasters, wars, migrations, pandemic diseases, etc. This thesis focuses on three of them: catastrophic agglomeration of firms as a response to tax differentials, immigration phenomena described as catastrophic by the natives and catastrophic earthquakes with destructive consequences for both physical and human capital. Finding evidence of their impact in the medium to long- run is not straightforward. Catastrophic agglomeration can appear dramatic to the jurisdiction that is abandoned by an important firm or set of firms, but – overall – firms are simply trying to find the economic conditions that allow them to compete and perform better. Anti-immigrant parties often describe immigration as a tragedy. However, immigrants may well be the sparkle that ignites the innovation and growth engine. Earthquakes cause great damage and might ask for a high price in terms of human lives. Nevertheless, many scholars have found a positive long-term effect of such events. This thesis aims to contribute to the public economics literature by assessing how and through which channels catastrophic events affect the economic environment. The first chapter studies – both theoretically and empirically – the relationship between new firm births and tax differentials by agglomeration intensity of the sector they operate in. The results show that, in Switzerland, the tax sensitivity of firms’ location choices drops sharply around the 80th percentile of observed agglomeration intensity. The second chapter focuses on how immigration fosters the electoral success of the Northern League, an anti-immigrants party, in Lombardy. It turns out that this does not only depend on the political ideology, but also on crowding-out of social services and competition on the labor market. Finally, the third chapter investigates the medium and long-term effects of earthquakes on economic and social development in Italy. While, in the long-run, the effect of earthquakes is positive, in the medium run only destructive quakes have a positive effect, whereas catastrophic ones have a negative effect on the evolution of the Human Development Index.
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