Rafael Góes holds a bachelor's and master's degree in economics and is currently a PhD candidate at PIMES/UFPE (Federal University of Pernambuco), as well as a visiting scholar at the University of Illinois at Urbana-Champaign. He also serves as a Substitute Professor at UFPE. His research focuses on applied microeconomics, particularly in urban economics, crime, and education, with a strong emphasis on causal inference. More broadly, he is interested in addressing compelling research questions through data analysis and robust identification strategies.
This paper investigates the labor market and economic impacts of an urban disaster in Maceió, Brazil, caused by industrial rock salt extraction. Using a difference-in-differences approach, we first assess the micro-local short-term impacts on employment in affected areas, leveraging annual employer-level data from 2015 to 2021 to estimate labor market disruptions. Next, we analyze household-level data from vulnerable populations to examine the disaster’s effects on both economic and social outcomes. Finally, to understand the broader economic consequences for the municipality, we use data from the Continuous National Household Sample Survey and apply synthetic control methods to construct a counterfactual scenario, allowing us to evaluate Maceió’s economic performance in the absence of the disaster. Our findings reveal a statistically significant 6% decrease in employment and a 9% increase in business closures in affected areas due to the disaster. Additionally, the disaster significantly impacted vulnerable households, with a reduction in child labor and an increase in access to medication for chronic diseases. At the city-wide level, we document a 20% decline in earnings from work among affected individuals and an overall reduction in employment rates by approximately 12.5%. These results provide critical insights into the labor market and social impacts of industrial urban disasters, emphasizing the need for robust policy interventions to address urban environmental risks. As the frequency of such disasters may rise due to climate change, this research highlights the importance of economic resilience planning and policy formulation in vulnerable urban areas.