Chapter Three : Water, Migration, and Human Capital Spillovers
earn greater returns on their human capital investments. Workers with lower skill levels stay in their home region in times of plenty, where they can earn agricultural incomes as farmers. Rainfall variation directly affects farmers’ incomes, and negative shocks can be particularly stressful for the least-wealthy households with poor access to infrastructure (such as irrigation), insurance (through credit markets and formal markets), or alternative income sources (such as a local manufacturing sector to work in). As shown in chapter 2, workers most vulnerable to the productivity impact of rainfall variation are likely to move in response to adverse climate shocks, provided they can bear the cost of moving. These workers also tend to have lower levels of human capital and their movement in response to adverse income shocks induced by climate conditions is associated with lower-skill migration. Additional evidence from India corroborates this, finding that climate migrants are selected from the lower end of the skill distribution and from households strongly dependent on agriculture (Sedova and Kalkuhl 2020) In most cases, such workers will move to cities within their home country, where they are more likely to find nonagricultural employment opportunities, often working (and even living) in the informal sector. But such migration can also occur across borders. Evidence suggests that droughts in Mexico are associated with increased migration to locations in the United States where strong migrant networks exist. Nevertheless, more educated individuals are less likely to engage in such migration, possibly because they have better local diversification opportunities (Hunter, Murray, and Riosmena 2013).
PRODUCTIVITY, GROWTH, AND WELFARE The implications of drought-induced migration for the productivity of cities and the larger economy are ostensibly different from other kinds of migration. Estimates from the data described in box 3.1 suggest that a reduction in rainfall from the 75th to the 25th percentile of this sample (that is, equivalent to the interquartile range) would imply 3.4 percent lower earnings for these migrants, reflecting lower productivity of the low-skilled migrants in the labor markets to which they move.1 The lower productivity of migrants escaping dry conditions may have negative effects on the growth of per capita incomes in their host regions. City growth driven by such migration may not necessarily be conducive to further economic growth, and drought-induced migration may in fact be one of the factors leading to the phenomenon of urbanization without growth that has been documented by researchers (Fay and Opal 1999; Gollin, Jedwab, and Vollrath 2016). Evidence from Indonesia, for instance, shows that rainfall-induced internal migration tends to reduce employment and wages of low-skilled native workers in the host region (Kleemans and Magruder 2018).
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