Unemployment claims increased between 12% and 17% due to the January 2025 Palisades and Eaton fires, according to a new report from the nonpartisan California Policy Lab.
Analysis by researchers at the University of California institute showed that unemployment claims surged not only in the fire zones but also among people living in neighborhoods far from the fires, especially in South and Central Los Angeles. There were also large increases in claims from workers in low-wage industries like accommodations and food services, and workers with lower levels of education.
“Our analysis shows the economic impacts extended beyond the Palisades and Altadena, as workers who live in areas like South and Central L.A. but commuted to work in the fire areas also filed for unemployment in the aftermath of the fires,” explains report co-author Till von Wachter, faculty director of the California Policy Lab at UCLA and a professor of economics. “This report shows the critical role that unemployment insurance benefits can play in supporting people after natural disasters, and also provides insights that can be helpful for future disaster response planning and targeting relief to impacted people.”
An estimated 6,300-8,700 employees in Los Angeles filed for regular unemployment insurance (UI) due to the wildfires, representing the 12%-17% increase from what would have been expected without the wildfires. Comparing this increase to the number of jobs in and near the wildfire perimeters shows that between 30% and 40% of workers who were potentially impacted by the fires filed for UI benefits.
An additional 5,000 workers filed for the federal Disaster Unemployment Assistance program (DUA), including gig workers, independent contractors and the self-employed, who are usually excluded from regular UI, bringing the total number of workers who filed to between 11,300 and 13,700. Undocumented workers are excluded from both DUA and regular UI benefits.
Commuters coming from other areas were also affected: While Central and South L.A. were untouched by the fires, there were large increases in UI claims being filed by workers who live in those areas, especially in neighborhoods where many residents commute to fire-affected areas.
Low-wage industries were hit hardest, particularly in the accommodation & food services category and the health care & social assistance category. There was a 50% higher increase in UI claim filing by workers with a high school diploma or less as compared to college-educated workers.
“Our research revealed key differences in who was impacted by the fires,” said report co-author Peter Mannino, senior data analyst at the California Policy Lab. “Service sector workers and people with lower levels of formal education were the hardest hit by job losses after the fires.”
The report used administrative Unemployment Insurance claims data — accessed through a long-standing research partnership between the California Policy Lab and the California Employment Development Department — to create a detailed picture of how the recent wildfires rippled through local labor markets — both within and beyond the directly impacted areas.
The California Policy Lab generates research insights for government impact. Through hands-on partnerships with government agencies, CPL performs rigorous research across issue silos and builds the data infrastructure necessary to improve programs and policies that millions of Californians rely on every day.
For more information, visit the California Policy Lab website.