Understanding the determinants of livelihood recovery after a large earthquake

Abstract

This chapter is an attempt to understand the determinants of livelihood recovery after a natural disaster by reviewing literature in this subject and conducting an empirical exercise. A panel firm level survey was conducted of 500 mostly small and micro enterprises in Bantul district after the 27 May 2006 Yogyakarta earthquake caused the death of more than 5.7 thousand people, injured more than 60 thousand people and destroyed the houses of hundreds of thousands. This survey provided the main data set for the empirical exercise. Bantul district was the one most severely affected by the earthquake. This chapter argues that (1) smaller enterprises are more resilient and so are able to recover faster and (2) an industrial cluster system within a sub district does provide the necessary support for firms to recover. However, there is no evidence that receiving aid induces a faster recovery rate. © 2011 Springer Science+Business Media, LLC.