Natural disasters and technological upgrading measured by changes in demand for ICT labour: Estimating the impacts with text

Abstract Extensive literature has studied the economic impact of natural disasters. However, specific impacts on labour markets have received less attention. Using a massive earthquake (> 8.0 Mw) that struck Chile in 2010 and proprietary data from a Chilean online job board (4,136 job postings published between 2008 and 2012), we examine changes in demand for Information and Communications Technologies, ICT, related labour as a proxy for technological upgrading, by assuming that ICT and related technologies drive much of the technical change in production. We implement a structural topic model to discover and estimate the difference in the prevalence of ICT and Construction labour. Our results show that ICT labour does not change. In contrast, Construction labour significantly differed after the disaster, suggesting that reconstruction activities led to employment differences. Our results suggest that there was no substantive technological replacement following the earthquake. JEL Classification: J20, Q54, O33