The Economic Impact of the 'Katrina Diaspora'

I was living in Atlanta when Hurricanes Katrina and Rita struck the Gulf Coast, and I remember the tens of thousands of people who flooded into Georgia in the aftermath. They were the lucky ones, the folks who had the transportation needed to get them away from the disaster.

In the days and weeks that followed, it seemed like every second or third car on Peachtree Street or I-285 had Louisiana or Mississippi tags. The news was filled with stories about overwhelmed regional Red Cross facilities -- and questions about whether local public school systems could absorb the expected influx of new students.

A very unhappy evacuee from Tulane University moved in to a garage apartment across the way from my place. My family tried to be friendly, but every conversation with her ended with "I just want to go home." She looked miserable most of the semester as she attended college in downtown Atlanta.

According to the Nielsen Company, greater New Orleans lost nearly 600,000 residents immediately following the storm in what the organization describes as "the largest one-time migration of Americans on record." Most of the evacuees ended up in nearby counties or other Southeastern cities such as Baton Rouge, La., Shreveport, La., Little Rock, Ark., Atlanta, Houston and Dallas.

100,000 People Isn't Really That Many

New Orleans newspaper The Times-Picayune says 100,000 residents have yet to come back to the Crescent City -- and many may never return home. I was curious about the economic impact of the "Katrina Diaspora," as some now call them, have made on the towns and cities in which they settled.

In the year immediately following the disaster, Atlanta and some other cities struggled to accommodate their post-Katrina arrivals. At the time, FEMA had reportedly expended more than $191 million in Georgia alone for Katrina and Rita evacuees. An August 2006 report by the nonprofit organization Appleseeds said the sudden influx of evacuees was challenging "Atlanta's ability to meet all the social service needs of its new residents, and its ability to integrate the influx of so many new residents, even if only temporary, into local housing, jobs, schools, legal services, and the health care system."

Five years on, it appears no one has done a definitive study of how many Katrina evacuees decided to settle outside of New Orleans. But most were apparently integrated into their new communities with relative ease -- and their arrival created only a momentary hiccup in local economies. In Houston, where thousands of Katrina evacuees still live, the region's economy only saw "a little bit of a bump" due to the sudden influx of available labor, says Dr. Thomas Smith, an assistant professor at Emory University's Goizueta Business School."

And in terms of the 100,000 New Orleans residents still living elsewhere, "in the grand scheme of things, that's not really that many," says Dr. Smith. "When we think about what 100,000 people dispersed across the [Southeastern] municipalities, those people can be absorbed pretty quickly. I think when it was first happening, people were really scared that there was going to be some mass [exodus] from one area to another area -- and they were going to need more social services or what have you. But I think that's kind of settled a bit. The people who had a really strong connection to New Orleans moved back, and people who had nothing back there stayed put."

Destination Cities Could Take the Pressure

For its part, Atlanta handled the stress -- partially because the expected tsunami of evacuees needing assistance turned out to be a relative trickle. In a 2006 statement, the Atlanta city government said only 188 evacuees were enrolled in the local public school system. "All students, regardless of documentation, who claimed to be from hurricane-impacted areas, were immediately enrolled in all Georgia public schools," said the statement, "and helped with necessary services including mental health."

The Texas Education Agency, meanwhile, recently said students who relocated to the state following Katrina have made significant academic progress, "and are performing slightly better than a demographically and economically matched set of Texas students."

Atlanta's Grady Memorial Hospital, one of the busiest in the southeast, received only 40 inpatients from New Orleans in the post-Katrina hospital evacuation and airlift operation -- along with an additional 14 other evacuees who were hospitalized in the days that followed. Charges for their services, according to the Grady Health System, came to more than $860,000.

Timing was important, says Dr. Smith. "When [Katrina] occurred we were in an economic recovery, a very strong economy. It would be very different if it occurred now, when we have high unemployment levels. There would be no way to absorb these economic migrants."