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Natural Disasters and Informality: Are local labor markets impacted after an earthquake?

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  • César Andrés Mendoza
  • Benjamin Jara

Abstract

This article studies the probability of being part of informal labor markets after a natural disaster. We consider different concepts of labor market informality and use empirical definitions for employment in the informal sector and informal employment. Since the Ecuadorian earthquake may be considered a natural experiment, we perform a two stage identification strategy using both coarsened exact matching (CEM), and nonlinear difference in differences (DD) using individual panel data. We use a fully exogenous measurement of intensity (Peak Ground Acceleration, PGA), which is continuous, and has not been subject to possible arbitrariness in its definition. We found that the earthquake had a positive effect in the likelihood of being part of informal sector if workers are located in the affected areas; we also identified significant gender differences, since a causal effect for men was found, but not for women. When we use the concept of informality based in jobs (informal employment) instead of companies (informal sector), no robust evidence of a causal effect was found. Our results suggest that the government's reconstruction efforts could had attenuated the effect of the disaster over informality in the most affected zones. Este artículo estudia la probabilidad de formar parte de los mercados laborales informales después de un desastre provocado por una amenaza natural. Se consideran diferentes conceptos de la informalidad del mercado laboral y se utilizan definiciones empíricas para el empleo en el sector informal y el empleo informal. Dado que el terremoto de Ecuador puede ser considerado un experimento natural, se implementó una estrategia de identificación en dos etapas que utilizó datos de panel individuales tanto para un sistema de cotejo exacto grueso (CEM, por sus siglas en inglés), y para las diferencias en diferencias (DD) no lineales. Se utilizó una medida de intensidad totalmente exógena (Peak Ground Acceleration, PGA), que es continua, y que no ha sido objeto de posibles arbitrariedades en su definición. Se encontró que el terremoto tuvo un efecto positivo en la probabilidad de formar parte del sector informal si los trabajadores se encontraban en las áreas afectadas; también se identificaron diferencias significativas de género, ya que se encontró un efecto causal para los hombres, pero no para las mujeres. Cuando se utilizó el concepto de informalidad basado en los empleos (empleo informal) en lugar de las empresas (sector informal), no se encontraron pruebas sólidas de un efecto causal. Estos resultados sugieren que los esfuerzos de reconstrucción del gobierno podrían haber atenuado el efecto del desastre sobre la informalidad en las zonas más afectadas. 本稿では、自然災害後にインフォーマル労働市場の一部となる確率を研究する。労働市場のインフォーマル性の様々な概念を考察し、インフォーマル・セクターにおける雇用とインフォーマル雇用は経験的定義によるものとした。エクアドル地震は自然実験と考えられるので、Coarsened Exact Matching(CEM)と個々のパネルデータを用いた差の非線形の差分の差分(difference in differences:DD)の両方を用いて二段階で特定する戦略を実行した。我々は、完全に外因性の強度の測定(表面最大加速度:PGA)を使用しているが、これは連続的であり、その定義に恣意的な可能性はない。我々は、被災地に労働者がいる場合、地震はインフォーマル・セクターの一部である可能性にプラスの効果をもたらすことを見出した。男性では因果関係が認められたが、女性では認められなかったことから、男女間の差も認められた。企業(インフォーマル・セクター)ではなく、仕事(インフォーマル雇用)に基づくインフォーマル性の概念を用いると、確かな因果効果のエビデンスは認められなかった。これらの結果から、政府の復興努力により、最も被害が大きい被災地域における非正規性に対する災害の影響が減弱されたことが示唆される。

Suggested Citation

  • César Andrés Mendoza & Benjamin Jara, 2020. "Natural Disasters and Informality: Are local labor markets impacted after an earthquake?," Regional Science Policy & Practice, Wiley Blackwell, vol. 12(1), pages 125-157, February.
  • Handle: RePEc:bla:rgscpp:v:12:y:2020:i:1:p:125-157
    DOI: 10.1111/rsp3.12258
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    Cited by:

    1. Sachiko Kazekami, 2022. "Regional differences in the epidemic shock on the local labor market and its spread," LABOUR, CEIS, vol. 36(1), pages 115-144, March.
    2. Acevedo, Ivonne & Castellani, Francesca & Lopez de la Cerda, Carlos & Lotti, Giulia & Székely, Miguel, 2023. "Natural Disasters and Labor Market Outcomes in Mexico," IDB Publications (Working Papers) 13131, Inter-American Development Bank.
    3. César Andrés Mendoza & Giulio Breglia & Benjamín Jara, 2020. "Regional labor markets after an earthquake. Short-term emergency reactions in a cross-country perspective. Cases from Chile, Ecuador, Italy [Regionale Arbeitsmärkte nach einem Erdbeben. Kurzfristig," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 40(2), pages 189-221, October.
    4. Veronica Leoni & David Boto-García, 2023. "The Effect of Natural Disasters on Hotel Demand, Supply and Labour Markets: Evidence from the La Palma Volcano Eruption," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 86(4), pages 755-780, December.
    5. Nuria Ceular-Villamandos & Virginia Navajas-Romero & Lorena Caridad y López del Río & Lucia Zita Zambrano-Santos, 2021. "Workplace Situation and Well-Being of Ecuadorian Self-Employed," Sustainability, MDPI, vol. 13(4), pages 1-26, February.

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