Natural Disasters and Labor Market Outcomes in Mexico

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Oct 2023
This study examines the relationship between climate change-induced 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% 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.