IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Natural disasters and labour markets

  • Martina Kirchberger
Registered author(s):

    While it is clear that natural disasters have serious welfare consequences for affected populations, less is known with respect to how local labour markets in low income countries adjust to such large shocks, in particular the general equilibrium effects of the increase in the demand for construction as well as the inflow of resources in the aftermath of natural disasters. Combining data from the Indonesia Family Life Survey, the Desinventar database, the US Geological Survey and district level employment indicators, this paper explores how a large earthquake in Indonesia affected local labour markets, in particular the evolution of wages and employment across sectors. We find that wage growth in the agriculture sector is significantly higher in earthquake affected areas. We propose two mechanisms for this result: a higher growth rate of the price of rice in agricultural communities which switch from being net sellers to net buyers of rice and a downward shift in the supply of workers in the agricultural sector. We show evidence for both mechanisms.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://www.csae.ox.ac.uk/workingpapers/pdfs/csae-wps-2014-19.pdf
    Download Restriction: no

    Paper provided by Centre for the Study of African Economies, University of Oxford in its series CSAE Working Paper Series with number 2014-19.

    as
    in new window

    Length:
    Date of creation: 2014
    Date of revision:
    Handle: RePEc:csa:wpaper:2014-19
    Contact details of provider: Postal: Manor Road, Oxford, OX1 3UQ
    Phone: +44-(0)1865 271084
    Fax: +44-(0)1865 281447
    Web page: http://www.csae.ox.ac.uk/Email:


    More information through EDIRC

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as in new window
    1. Patrick Kline, 2008. "Understanding Sectoral Labor Market Dynamics: An Equilibrium Analysis of the Oil and Gas Field Services Industry," Cowles Foundation Discussion Papers 1645, Cowles Foundation for Research in Economics, Yale University.
    2. Eduardo Cavallo & Sebastian Galiani & Ilan Noy & Juan Pantano, 2010. "Catastrophic Natural Disasters and Economic Growth," Research Department Publications 4671, Inter-American Development Bank, Research Department.
    3. Derek Kellenberg & A. Mushfiq Mobarak, 2011. "The Economics of Natural Disasters," Annual Review of Resource Economics, Annual Reviews, vol. 3(1), pages 297-312, October.
    4. Matthew E. Kahn, 2005. "The Death Toll from Natural Disasters: The Role of Income, Geography, and Institutions," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 271-284, May.
    5. Nathan Nunn & Diego Puga, 2007. "Ruggedness: The blessing of bad geography in Africa," Working Papers 2007-09, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales, revised 01 May 2010.
    6. Paxson, Christina H, 1992. "Using Weather Variability to Estimate the Response of Savings to Transitory Income in Thailand," American Economic Review, American Economic Association, vol. 82(1), pages 15-33, March.
    7. Leamer, Edward E, 1983. "Let's Take the Con Out of Econometrics," American Economic Review, American Economic Association, vol. 73(1), pages 31-43, March.
    8. Stefan Dercon, 2003. "Growth and Shocks: evidence from rural Ethiopia," CSAE Working Paper Series 2003-12, Centre for the Study of African Economies, University of Oxford.
    9. John Strauss & Duncan Thomas & Firman Witoelar & Elizabeth Frankenberg & Bondan Sikoki & Cecep Sumantri & Wayan Suriastini, 2010. "Cutting the costs of attrition: Results from the Indonesia Family Life Survey," Working Papers id:2652, eSocialSciences.
    10. Ariel R. Belasen & Solomon W. Polachek, 2009. "How Disasters Affect Local Labor Markets: The Effects of Hurricanes in Florida," Journal of Human Resources, University of Wisconsin Press, vol. 44(1).
    11. Townsend, R.M., 1991. "Risk and Insurance in Village India," University of Chicago - Economics Research Center 91-3, Chicago - Economics Research Center.
    12. Eric Strobl, 2011. "The Economic Growth Impact of Hurricanes: Evidence from U.S. Coastal Counties," The Review of Economics and Statistics, MIT Press, vol. 93(2), pages 575-589, May.
    13. Loayza, Norman & Olaberria, Eduardo & Rigolini, Jamele & Christiaensen, Luc, 2009. "Natural disasters and growth - going beyond the averages," Policy Research Working Paper Series 4980, The World Bank.
    14. Thomas Fomby & Yuki Ikeda & Norman V. Loayza, 2013. "The Growth Aftermath Of Natural Disasters," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 28(3), pages 412-434, 04.
    15. Deryugina, Tatyana, 2011. "The Role of Transfer Payments in Mitigating Shocks: Evidence From the Impact of Hurricanes," MPRA Paper 53307, University Library of Munich, Germany, revised 08 Aug 2013.
    16. Mueller, Valerie & Quisumbing, Agnes, 2010. "Short- and long-term effects of the 1998 Bangladesh flood on rural wages," IFPRI discussion papers 956, International Food Policy Research Institute (IFPRI).
    17. Neil McCulloch, 2008. "Rice Prices And Poverty In Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 44(1), pages 45-64.
    18. Conley, T. G., 1999. "GMM estimation with cross sectional dependence," Journal of Econometrics, Elsevier, vol. 92(1), pages 1-45, September.
    19. Anjini Kochar, 1999. "Smoothing Consumption by Smoothing Income: Hours-of-Work Responses to Idiosyncratic Agricultural Shocks in Rural India," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 50-61, February.
    20. Robin Burgess & Matthew Hansen & Benjamin Olken & Peter Potapov & Stefanie Sieber, 2012. "The Political Economy of Deforestation in the Tropics," Working Papers id:4963, eSocialSciences.
    21. Corden, W M, 1984. "Booming Sector and Dutch Disease Economics: Survey and Consolidation," Oxford Economic Papers, Oxford University Press, vol. 36(3), pages 359-80, November.
    22. Varela, Gonzalo & Aldaz-Carroll, Enrique & Iacovone, Leonardo, 2012. "Determinants of market integration and price transmission in Indonesia," Policy Research Working Paper Series 6098, The World Bank.
    23. Enrico Moretti, 2010. "Local Multipliers," American Economic Review, American Economic Association, vol. 100(2), pages 373-77, May.
    24. Rose, Elaina, 2001. "Ex ante and ex post labor supply response to risk in a low-income area," Journal of Development Economics, Elsevier, vol. 64(2), pages 371-388, April.
    25. Dakshina G. De Silva & Robert P. McComb & Young-Kyu Moh & Anita R. Schiller & Andres J. Vargas, 2010. "The Effect of Migration on Wages: Evidence from a Natural Experiment," American Economic Review, American Economic Association, vol. 100(2), pages 321-26, May.
    26. Suresh De Mel & David McKenzie & Christopher Woodruff, 2012. "Enterprise Recovery Following Natural Disasters," Economic Journal, Royal Economic Society, vol. 122(559), pages 64-91, 03.
    27. Edward L. Glaeser & David C. Mare, 1994. "Cities and Skills," NBER Working Papers 4728, National Bureau of Economic Research, Inc.
    28. Seema Jayachandran, 2006. "Selling Labor Low: Wage Responses to Productivity Shocks in Developing Countries," Journal of Political Economy, University of Chicago Press, vol. 114(3), pages 538-575, June.
    29. Carrington, William J, 1996. "The Alaskan Labor Market during the Pipeline Era," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 186-218, February.
    30. Francisco Alvarez-Cuadrado & Markus Poschke, 2011. "Structural Change Out of Agriculture: Labor Push versus Labor Pull," American Economic Journal: Macroeconomics, American Economic Association, vol. 3(3), pages 127-58, July.
    31. Donald R. Davis & David E. Weinstein, 2002. "Bones, bombs and break points: The geography of economic activity," Discussion Papers 0102-02, Columbia University, Department of Economics.
    32. Enrico Moretti, 2010. "Local Labor Markets," NBER Working Papers 15947, National Bureau of Economic Research, Inc.
    33. World Bank & United Nations, 2010. "Natural Hazards, UnNatural Disasters : The Economics of Effective Prevention," World Bank Publications, The World Bank, number 2512.
    34. Miguel, Edward & Roland, Gérard, 2011. "The long-run impact of bombing Vietnam," Journal of Development Economics, Elsevier, vol. 96(1), pages 1-15, September.
    35. Horwich, George, 2000. "Economic Lessons of the Kobe Earthquake," Economic Development and Cultural Change, University of Chicago Press, vol. 48(3), pages 521-42, April.
    36. Molly Fifer McIntosh, 2008. "Measuring the Labor Market Impacts of Hurricane Katrina Migration: Evidence from Houston, Texas," American Economic Review, American Economic Association, vol. 98(2), pages 54-57, May.
    37. Timothy Halliday, 2005. "Migration, Risk and Liquidity Constraints in El Salvador," Working Papers 200511, University of Hawaii at Manoa, Department of Economics, revised 28 Mar 2006.
    38. Udry, Christopher, 1995. "Risk and Saving in Northern Nigeria," American Economic Review, American Economic Association, vol. 85(5), pages 1287-1300, December.
    39. Ilan Noy, 2007. "The Macroeconomic Consequences of Disasters," Working Papers 200707, University of Hawaii at Manoa, Department of Economics.
    40. Corden, W Max & Neary, J Peter, 1982. "Booming Sector and De-Industrialisation in a Small Open Economy," Economic Journal, Royal Economic Society, vol. 92(368), pages 825-48, December.
    41. Keane, Michael P & Prasad, Eswar S, 1996. "The Employment and Wage Effects of Oil Price Changes: A Sectoral Analysis," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 389-400, August.
    42. Ariel R. Belasen & Solomon W. Polachek, 2008. "How Hurricanes Affect Wages and Employment in Local Labor Markets," American Economic Review, American Economic Association, vol. 98(2), pages 49-53, May.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:csa:wpaper:2014-19. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Richard Payne)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.