Papers
One Price Fits All? Cross-Subsidies in Uniformly Priced Natural Perils Insurance
Norges Bank Working Paper 4/2026
Job Market Paper 2026
Abstract: This paper quantifies cross-subsidies in Norway’s natural perils insurance scheme, where a uniform premium is charged regardless of location-specific natural hazard risk. Using individual property data, hazard zone maps, and municipal insurance payouts, I estimate the actuarially fair premiums inside and outside high-risk areas that would apply under a two-tier risk-based scheme. The results show that uniform pricing leads to substantial redistribution, implicitly subsidizing high-risk properties. Focusing on households and flood risk, I find that the actuarially fair premium in flood zones would be about 13 times higher than the uniform flood premium charged today, and approximately 65 times higher than in non-flood zones. These cross-subsidies imply extensive sharing of the risks and losses related to natural disasters, but likely reduce incentives and impede effective adaptation. The findings shed light on the trade-offs between efficiency and distribution in natural perils insurance, and inform broader discussions on scheme design.
Selected presentations and discussions:
BI-NBER-NYU Conference on Climate and Nature Finance 2026; NBER PhD Student Workshop on Climate Finance (roundtable discussions, 2025); The Norwegian Association of Economists Annual Meeting 2025
Weathering the Storm: The Effects of Natural Disasters on Households under Universal Insurance
with Sigurd M. Galaasen, Emilia Garcia-Appendini and Mathis Mæhlum
Norges Bank Working Paper 3/2026
Abstract: We study the indirect economic consequences of natural disasters for households using high-quality household-level data from Norway. Universal natural disaster insurance in this setting fully compensates direct physical damages, allowing us to isolate indirect effects. Linking a municipality-level measure of disaster severity to detailed transaction data measuring household expenditures, and using a matched difference-in-differences design, we find large and persistent effects on consumption: the cumulative spending fall up to four years after an event amounts to as much as 45 percent of the direct damages. Population-wide administrative records on income, wealth, housing transactions, and labor-market outcomes allow us to uncover the underlying mechanisms. First, labor income falls while unemployment increases after disasters, particularly when damages are concentrated among firms, consistent with disruptions to local labor markets. Second, housing wealth declines persistently, and homeowners cut spending more than renters despite similar income losses. Our results show that the household costs of natural disasters extend beyond the insured value of destroyed property, as households remain exposed to losses transmitted through local labor and housing markets.
Selected presentations:
NBER Climate Finance Conference (2025); CEPR Climate Change and the Environment Symposium (2025); NYU Stern Summer Climate Finance (PhD Poster Session, 2025)
Lost in transition? Earnings losses of displaced petroleum workers
with Jon Ellingsen and Sebastian F. Johansson
Earlier version: CAMP Working Paper Series 06/2022
Abstract: We estimate the earnings losses of displaced petroleum workers using a matched employer-employee longitudinal data set from Norway, coupled with an event-study framework of the oil price drop in 2014. Displacement leads to sizable and persistent earnings losses, and the magnitudes are particularly large for petroleum workers moving to other industries. More importantly, we document that almost 70 percent of the earnings losses can be attributed to lost industry-specific earnings premiums caused by workers moving from an industry characterized by large resource rents. In contrast, worker-industry match effects are negligible.
Other
Monetary Policy in Commodity-Exporting Countries (in Norwegian), Master Thesis, 2015