Household labor reallocation provides a potentially important channel for rural households to adapt to changing weather patterns. Exploiting the temporal and spatial variation of drought occurrence in India, I find that drought reduces the share of agriculture labor hours by 3% or by 110 hours (3% at the mean). This reduction is driven by households that do not own land. Motivated by these facts, I develop a model of labor allocation across the agriculture and non-agriculture sectors to analyze how droughts may affect structural transformation. My results imply that projected increases in the frequency of droughts over the next 30 years will induce landowning households to allocate 2% more labor to agriculture and induce landless households to reduce their agricultural labor. The net effect is a 1% to 2% reduction in agricultural labor. While small in percentage terms, this implies that 2.5 to 5 million individuals would leave agriculture. I use the model to analyze how projected climate change would affect the cost to the government of achieving its stated target of increasing the manufacturing share of GDP to 25% by 2035. In the absence of climate change, the government would have to subsidize non-agriculture wages by 28% with respect to 2011 non-agriculture wages. Under the current climate change projections, the subsidy would need to be 73% larger.
"Drought Shocks and Household Occupation Choices" (Draft Coming Soon)
Droughts are becoming increasingly common in India, where 50% of the labor force works in agriculture, and most agricultural production is rainfall dependent. This paper investigates the extent to which rural households adapt to drought by reallocating labor from agriculture to other sectors of the economy. I combine high-resolution data on drought with panel data on about 8,000 Indian households collected over a 20-year period in rural areas in 184 districts. I use household-level fixed effects regressions to estimate how drought affects household consumption and diversification from agriculture and to investigate the mechanisms underlying these effects. I find that household consumption declines by 7.3% in response to drought and agricultural jobs decline by 2.9% in the year following a drought. Further, I find that these effects are mediated by job skills and land ownership. Specifically, I find that households with working members who have completed primary education account for most of the workers who exit the agricultural sector. In contrast, I find that households that own land increase their agricultural labor share after experiencing a drought. Thus, while I find that drought causes households to diversify away from agriculture on aggregate, the extent of this structural change is mitigated by the behavior of landowners. Cultural norms, relative prices, and land market transaction costs provide potential explanations for this behavior.
Work in Progress
A model of Tiebout sorting on race and environmental quality is tested using data describing residential location, demographics, and chronic conditions for 735,647 seniors over a 15 year period. This article finds evidence that seniors respond to information about the existence and cleanup of Superfund sites. In particular, I find seniors living near Superfund sites have a 0.5 percentage point higher probability to move out compared to seniors living farther away. Additionally, I find white seniors respond to the existence and clean-up of Superfund sites by exiting such neighborhoods at a higher rate compared to non-white seniors. Furthermore, high-income movers moving out of existing or cleaned up Superfund site neighborhoods tend to move to neighborhoods with higher median household income, higher median house value, and higher rates of owner-occupancy. However, lower-income non-white seniors moving out of cleaned-up Superfund site neighborhoods move to neighborhoods characterized by lower median household income, median house value, and higher renter-occupied properties. These findings add to the Environmental Justice literature.
"Airport Expansion, Air Pollution, and Death Count in Mexico City."
with Luis A. Fernández Intriago