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Long-term Impacts of Droughts on Labour Markets in Developing Countries: Evidence from Brazil

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  • Valerie Mueller
  • Daniel Osgood

Abstract

Climate shocks have well-documented impacts on the short-term welfare of rural households in developing countries. We investigate the impact of droughts on Brazilian labour markets. We find long-term rural wage losses beyond the immediate impact of the drought, with affected workers taking five years to catch up with their peers. Findings are robust to model specification. The severity of the losses varies with the dependence on agricultural income, supporting the notion of diversifying portfolio strategies in rural areas to reduce climate-related income risk.

Suggested Citation

  • Valerie Mueller & Daniel Osgood, 2009. "Long-term Impacts of Droughts on Labour Markets in Developing Countries: Evidence from Brazil," Journal of Development Studies, Taylor & Francis Journals, vol. 45(10), pages 1651-1662.
  • Handle: RePEc:taf:jdevst:v:45:y:2009:i:10:p:1651-1662
    DOI: 10.1080/00220380902935865
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