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Blame it on the Rain: The Effects of Weather Shocks on Formal Rural Employment in Colombia

Author

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  • Camilo Bohorquez-Penuela
  • Andrea Otero-Cortes

Abstract

Episodes of excessive or low rainfall have not only become more frequent, but also more severe. These events can affect agricultural production and local labor markets. By combining social security records, that allow us to measure formal employment, with administrative data from weather stations, we estimate the effects of municipality-level precipitation shocks on formal rural employment in Colombia, as well as country-wide events like El Nino and La Nina phenomena. Fixed effects estimates show that episodes of excessive rainfall—measured as those that are above the 80th percentile of historical mean precipitation in the last 30 years for each municipality—have a negative impact on formal employment in rural areas for both the agricultural and non-agricultural sector, ranging from -2.2 percent to -3 percent, respectively. Likewise, we find that both El Nino and La Nina phenomena have a negative impact on total formal employment in rural areas. Additionally, we explore if the effect of rain shocks varies depending on the access to irrigation and drainage technologies, finding that municipalities with high prevalence of irrigation systems are less affected by episodes of low rainfall. **** RESUMEN: Los episodios de excesiva o poca precipitación no solo se han vuelto más frecuentes sino que cada vez son más severos. Estos eventos pueden afectar la producción agrícola y las dinámicas de los mercados laborales locales. Combinando registros de seguridad social, que nos permiten identificar empleo formal, con datos administrativos de las estaciones meteorológicas, estimamos los efectos de los choques de lluvia a nivel municipal sobre el empleo formal rural en Colombia, al igual que el impacto de los fenómenos de El Nino y La Nina. Los estimadores de efectos fijos muestran que los episodios de excesiva precipitación, medidos como aquellos que se ubican por encima del percentil 80 de la distribución histórica para cada municipio, tienen un impacto negativo sobre el empleo formal rural tanto para el sector agrícola como para el no agrícola, ubicándose entre -2.2 y -3 por ciento, respectivamente. De igual forma, encontramos que los fenómenos de El Nino y La Nina tienen un impacto negativo sobre el empleo formal rural. Adicionalmente, exploramos si el efecto de los choques de lluvia depende del acceso a sistemas de riego, encontrando que municipios con alta incidencia de estos mecanismos de irrigación son menos propensos a verse afectados por episodios de poca precipitación.

Suggested Citation

  • Camilo Bohorquez-Penuela & Andrea Otero-Cortes, 2020. "Blame it on the Rain: The Effects of Weather Shocks on Formal Rural Employment in Colombia," Documentos de Trabajo Sobre Economía Regional y Urbana 18404, Banco de la República, Economía Regional.
    • Handle: RePEc:col:000102:018404
    DOI: 10.32468/dtseru.292
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    Cited by:

    1. Bohorquez-Penuela, Camilo, 2021. "Weather Shocks and Agricultural Credit in Developing Countries: Evidence from a Second-Floor Institution," 2021 Annual Meeting, August 1-3, Austin, Texas 313994, Agricultural and Applied Economics Association.

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    More about this item

    Keywords

    Formal labor market; employment; weather shocks; agriculture; Colombia; Mercado laboral formal; empleo; choques climáticos; agricultura; Colombia;
    All these keywords.

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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