Natural Disasters in Latin America: The Role of Disaster Type and Productive Sector on the Urban-Rural Income Gap and Rural to Urban Migration

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Messick, Madeline Alice
disasters; macroeconomic shock; migration; income gap; rural; urban; Economic Policy; Emergency and Disaster Management; Growth and Development; Income Distribution; International Economics; Latin American Studies; Macroeconomics; Other Political Science; Political Economy; Regional Economics; Social Welfare; Urban Studies
thesis / dissertation description
This research provides insight into the impact of natural disasters as drivers of rural to urban migration in Latin America and the Caribbean (LAC). Disasters of varying types are predicted to have differing impacts on the productive sectors of agriculture, industry, and services; which due to the concentration of the various productive sectors in either urban or rural areas, subsequently changes the urban-rural wage differential. Changes to the wage differential (as measured by the urban-rural income gap) are predicted to lead to movement between urban and rural areas until a new equilibrium wage is reached.This dissertation first identifies a cut-off point for “large” disasters, where large is defined as having a substantial negative impact on the growth in GDP. The next question investigates whether the type of disaster economically impacts the sectors of agriculture, industry, and services in varying degrees. The third question examines changes to the urban-rural income gap in LAC countries as a result of the type of disaster. The final question analyzes rural to urban migration post-disaster in LAC countries. These macroeconomic analyses are conducted at the country-level using a fixed effects regression estimator.Droughts, floods, storms, and wildfires negatively affect the growth in agricultural output in LAC countries, while industry is negatively affected by earthquakes. Floods, landslides, and wildfires are also inversely associated with output in industry. Earthquakes are associated with decreases in output in the services sector while floods are associated with increases.Droughts and wildfires are associated with a decline in the relative position of rural incomes when compared to urban. Earthquakes are associated with a decrease in the relative strength of urban incomes when compared to rural. The urban-rural income gap is most likely a moderating factor between disasters and migration.Migration peaks one to two years after a disaster. This dissertation concludes that there is support for the hypothesis that different types of disasters have differing impacts on the sectors of production, which in turn leads to changes in the urban-rural income gap, which subsequently plays a role in rural to urban migration.