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Short- and long-term effects of the 1998 Bangladesh flood on rural wages

Author

Listed:
  • Mueller, Valerie
  • Quisumbing, Agnes
Abstract
Natural disasters have particularly devastating impacts on economic growth in developing countries because they impede the accumulation of capital. The resilience of labor markets is crucial especially for the poor who rely only on labor to diversify their income portfolio and buffer against risk. Such a risk management strategy may become more challenging as global climate change increases the frequency of natural disasters. We use the Bangladesh Flood Impact panel household survey to evaluate how the 1998 “flood of the century” affected wages in Bangladesh. We find long-term declines in wages where nonagricultural labor markets are more severely affected. We also evaluate how soil quality and proximity to auxiliary labor markets cushion labor markets against the disaster. The most compelling evidence shows that workers in areas further from centers of economic activity are more vulnerable to flood-induced wage losses. Our findings suggest that future emergency relief and climate change programs should consider the protection of labor markets by improving infrastructure to facilitate job searches in alternative locations or reduce migration costs.

Suggested Citation

  • 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).
    • Handle: RePEc:fpr:ifprid:956
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    Cited by:

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    2. Kirchberger, Martina, 2017. "Natural disasters and labor markets," Journal of Development Economics, Elsevier, vol. 125(C), pages 40-58.
    3. Ilan Noy & Cuong Nguyen & Pooja Patel, 2021. "Floods and Spillovers: Households after the 2011 Great Flood in Thailand," Economic Development and Cultural Change, University of Chicago Press, vol. 69(2), pages 829-868.
    4. Odozi, John Chiwuzulum & Uwaifo Oyelere, Ruth, 2021. "Does violent conflict affect the labor supply of farm households? The Nigerian experience," Agricultural and Resource Economics Review, Cambridge University Press, vol. 50(3), pages 401-435, December.
    5. Javier E. Baez & Dorothy Kronick & Andrew D. Mason, 2013. "Rural Households in a Changing Climate," The World Bank Research Observer, World Bank, vol. 28(2), pages 267-289, August.
    6. Alfani, Federica & Arslan, Aslihan & McCarthy, Nancy & Cavatassi, Romina & Sitko, Nicholas, 2021. "Climate resilience in rural Zambia: evaluating farmers’ response to El Niño-induced drought," Environment and Development Economics, Cambridge University Press, vol. 26(5-6), pages 582-604, October.
    7. Chiwuzulum Odozi, John & Oyelere, Ruth Uwaifo, 2020. "Violent Conflict Exposure in Nigeria and Labor Supply of Farm Households," GLO Discussion Paper Series 712, Global Labor Organization (GLO).
    8. Aznarul Islam & Susmita Ghosh, 2021. "Economic transformation in the wake of flood: a case of the lower stretch of the Mayurakshi River Basin, India," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(10), pages 15550-15590, October.

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    More about this item

    Keywords

    accumulation of capital; Climate change; Disasters; economic growth; flood; labor markets; migration costs; Risk management; Soil quality; Wages;
    All these keywords.

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