Rural Mobility and Climate Vulnerability: Evidence from the 2015 Drought in Ethiopia

In 2015, Ethiopia experienced the worst meteorological drought in decades. This paper investigates vulnerability to drought by applying a difference-in-differences strategy to this event, in a natural experiment. I construct a Standardised Precipitation Index using 35 years of satellite rainfall data to exogenously measure local drought intensity, and combine with nationally representative household panel data. Results show that households experiencing at least a one in 20-year drought have, on average, 12 percent lower annual consumption and 38 percent lower agricultural production than they would otherwise have in a typical year. Results are robust to varying sets of counterfactuals, placebo treatments and identification using the change-in-changes method. Drought has a greater impact on poorer households, female-headed households and larger producers. Production is sensitive to drought severity. In a context of increasing drought frequency and intensity, these findings imply lower expected returns to investment in agriculture, hindering rural development. Results also suggest drought induces positive production spillover effects in nearby areas, which could support resilience. This mechanism may be facilitated by increased factor mobility and market interactions between villages during times of drought. Evidence from rural Ethiopia indicates that transport services, mobile phones and social networks are important for resilience, but the effect of road infrastructure alone is less clear. Public investment in these services may have untapped potential to reduce climate vulnerability.