EFFECTS OF RECOVERY AND RECONSTRUCTION PROJECTS FROM THE GREAT EAST JAPAN EARTHQUAKE ON THE LOCAL ECONOMY

Abstract

The Great East Japan Earthquake of 2011 caused severe damage in the Tohoku region. The Japanese government and local governments have carried out various recovery and reconstruction projects. However, what effect has the recovery and reconstruction projects have had on the local economy so far? In this study, we analyzed the economic ripple effects of recovery and reconstruction grants on affected regions. The analysis period of this study is from FY 2011 to FY2017. As a result of FY2017, the amount of production induced due to restoration and reconstruction projects in disaster-affected areas is 2.7 trillion yen in total in the disaster-affected areas, 1.3 trillion yen in other parts of Japan, and 4.1 trillion yen in total nationwide. It is due to the economic structure of the region that about one-third of the ripple effects were leaked to other countries. Furthermore, in order to analyze the contribution to gross regional production (GRP) in each region due to the flow effect of restoration and reconstruction projects, we estimated the ratio of GRPs induced by recovery and reconstruction projects to the actual amount of GRP in each living sphere from the amount of production induced. As a result, it became clear that there are regions where the contribution of recovery and reconstruction investment is large and those that do not.