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Climate Change and Labor Markets in Rural Mexico: Evidence from Annual Fluctuations in Weather

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  • Jessoe, Katrina
  • Manning, Dale T.
  • Taylor, J. Edward

Abstract

This paper evaluates the effects of annual fluctuations in temperature and precipitation on labor allocation in rural Mexico. We use a 28-year panel of individuals to investigate how people adjust their sector and location of work in response to year-to-year variation in weather. Controlling for state-year and individual fixed effects, we find that individuals are less likely to work locally in years with a high occurrence of extreme heat. This reduction in labor occurs for both agricultural and non-agricultural jobs, with larger reductions among wage workers. Extreme heat early in the year or for individuals located close to the U.S. border increases the likelihood that individuals respond by migrating to the United States. Under two medium-emissions climate change scenarios, our results imply that increased temperatures will lead to a 1.2-3% decrease in local employment and a 1-2% increase in domestic migration from rural to urban areas. These results provide an important example of how climate change could impact rural labor markets in developing countries.

Suggested Citation

  • Jessoe, Katrina & Manning, Dale T. & Taylor, J. Edward, 2014. "Climate Change and Labor Markets in Rural Mexico: Evidence from Annual Fluctuations in Weather," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170556, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea14:170556
    DOI: 10.22004/ag.econ.170556
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    References listed on IDEAS

    as
    1. Maximilian Auffhammer & Ryan Kellogg, 2011. "Clearing the Air? The Effects of Gasoline Content Regulation on Air Quality," American Economic Review, American Economic Association, vol. 101(6), pages 2687-2722, October.
    2. Aslihan Arslan & J. Edward Taylor, 2011. "Transforming Rural Economies: Migration, Income Generation and Inequality in Rural Mexico," Journal of Development Studies, Taylor & Francis Journals, vol. 48(8), pages 1156-1176, November.
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    Cited by:

    1. Francesca Marchetta & David E. Sahn & Luca Tiberti, 2018. "School or work?The role of weather shocks in Madagascar," Cahiers de recherche CREATE 2018-2, CREATE.
    2. Chiara Falco & Marzio Galeotti & Alessandro Olper, 2018. "Climate change and Migration: Is Agriculture the Main Channel?," IEFE Working Papers 100, IEFE, Center for Research on Energy and Environmental Economics and Policy, Universita' Bocconi, Milano, Italy.
    3. Meza-Pale, Pablo & Yunez-Naude, Antonio, 2015. "The Effect of Rainfall Variation on Agricultural Households: Evidence from Mexico," 2015 Conference, August 9-14, 2015, Milan, Italy 212457, International Association of Agricultural Economists.
    4. Luigi Minale, 2018. "Agricultural productivity shocks, labour reallocation and rural–urban migration in China," Journal of Economic Geography, Oxford University Press, vol. 18(4), pages 795-821.
    5. Alan Martín Hernández-Solano & Véronique Sophie Avila-Foucat, 2019. "Adaptación al cambio climático y sus efectos en la economía de los hogares rurales mexicanos productores de alimentos. (Climate change adaptation and its effects on the economy of the rural Mexican ho," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(1), pages 61-86, May.
    6. Shuai Chen & Paulina Oliva & Peng Zhang, 2017. "The Effect of Air Pollution on Migration: Evidence from China," NBER Working Papers 24036, National Bureau of Economic Research, Inc.

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    Keywords

    Environmental Economics and Policy; Labor and Human Capital;

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