Responses to Temperature Shocks: Labor Markets and Migration Decisions in El Salvador

By 2017, one-quarter of people born in El Salvador were estimated to live in the U.S. We show that extreme temperatures negatively impact agricultural production and increase international migration. Corn producers respond by reducing demand for agricultural workers and substituting them with household labor. Unlike other contexts, there is no evidence of reallocation to the non-agricultural sector. This, combined with a strong history of migration to the U.S., explains the increase in international migration. Our findings underscore how international migration serves as a response to extreme temperatures when local labor markets fail to absorb displaced workers and if financially feasible.