Faculty of Economics and Business Administration Publications Database

Internal Labor Migration as a Shock Coping Strategy: Evidence from a Typhoon

Zylberberg, Yanos
Volume: 8
Number: 2
Pages: 123 - 153
Month: April
ISSN-Print: 1945-7782
Link External Source: Online Version
Year: 2016
Keywords: Risk Sharing; Internal migration; Natural Disasters; Vietnam

We analyze how internal labor migration facilitates shock coping in rural economies. Employing high-precision satellite data, we identify objective variations in the inundations generated by a catastrophic typhoon in Vietnam and match them with household panel data before and after the shock. We find that, following a massive drop in income, households cope mainly through labor migration to urban areas. Households with settled migrants ex ante receive more remittances. Nonmigrant households react by sending new members away who then remit similar amounts than established migrants. This mechanism is most effective with long-distance migration, while local networks fail to provide insurance.