The income consequences of a managed retreat

Abstract

Managed retreat is the relocation of households out of harm's way. After the 2011 Christchurch (New Zealand) earthquake, around 16000 people were thus relocated in a managed retreat program. We use administrative panel data (2004–2018) to identify the effects of this managed retreat on the relocated population. We find that, compared to the non-relocated residents, the relocated population experienced a significant initial decrease in their wages, and in their total income. Wages of those who were relocated were reduced by around $NZ 1900. Women faced greater absolute and relative decreases in wages. This finding has direct implications for the compensation packages that should be proposed for managed retreat programs.