Natural Disasters and Labor Market Outcomes in Mexico

43 Pages Posted: 13 Feb 2024

See all articles by Ivonne Acevedo

Ivonne Acevedo

Center for Education and Social Studies

Francesca Castellani

Inter-American Development Bank (IDB)

Carlos Lopez de la Cerda

Inter-American Development Bank

Giulia Lotti

Inter-American Development Bank (IDB)

Miguel Székely

Center for Education and Social Studies

Abstract

This study examines the relationship between weather emergencies and labor market outcomes in Mexico from 2016 to 2020. Using panel data and a two-way fixed effects estimation, the analysis focuses on storms, floods, wildfires, and landslides. The results show that storms can have significant negative associations with labor market outcomes. When living in municipalities affected by storms, individuals experience 3.5 percent lower wages. Also, storms are associated to a decrease in weekly working hours, while the rest of weather-related emergencies do not show significant effects. Furthermore, the probability of employment is negatively and significantly affected by storms, resulting in a 1 percentage point reduction in the likelihood of being employed. Finally, when evaluating dynamic effects, we also find that individuals living in municipalities affected by landslides experience a worsening of labor market outcomes (employment, hours, and wages) in the following quarter.

Keywords: weather emergencies, labor market, Mexico, Storms, floods.

Suggested Citation

Acevedo, Ivonne and Castellani, Francesca and Lopez de la Cerda, Carlos and Lotti, Giulia and Székely, Miguel, Natural Disasters and Labor Market Outcomes in Mexico. Available at SSRN: https://ssrn.com/abstract=4724173 or http://dx.doi.org/10.2139/ssrn.4724173

Ivonne Acevedo

Center for Education and Social Studies

Francesca Castellani

Inter-American Development Bank (IDB)

Carlos Lopez de la Cerda

Inter-American Development Bank ( email )

1300 New York Av NW
Washington, DC
United States

Giulia Lotti

Inter-American Development Bank (IDB) ( email )

1300 New York Avenue NW
Washington, DC 20577
United States

Miguel Székely (Contact Author)

Center for Education and Social Studies ( email )

Mexico City
Mexico

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