Long-term effects of weather-induced migration on urban labor and housing markets
with Matias Busso
Journal of Urban Economics, 2025 (conditionally accepted)
This paper explores the effects of weather-induced rural-urban migration on labor and housing market outcomes of urban residents in Brazil. In order to identify causal effects, it uses weather shocks to the rural municipalities of origin of migrants. We show that larger migration shocks led to an increase in employment growth and a reduction in wage growth of 4 and 5 percent, respectively. The increased migration flows also affected the housing market in destination cities. On average, it led to 4 percent faster growth of the housing stock, accompanied by 6 percent faster growth in housing rents. These effects vary sharply by housing quality. We find a substantial positive effect on the growth rates of the most penurious housing units (with no effect on rents) and a negative effect on the growth of housing units in the next quality tier (with a positive effect on rents). This suggests that rural immigration growth slowed down housing-quality upgrading in destination cities.
Why did COVID-19 affect some cities more than others? Insights from Brazil before vaccination
Regional Science Policy and Practice, 2024
This paper examines the local impact of COVID-19 in 2,500 cities in Brazil, contrasting findings with existing international estimates. It shows that pre-pandemic city characteristics have time-varying correlations with COVID-19 deaths per capita in Brazil and that the evolution of these correlations can differ significantly from other countries. Some patterns, such as the association between population density and mortality, are consistent across international experiences. However, in contrast to the U.S. but consistent with studies in China, Italy, and other European countries, the pandemic in Brazil took a greater toll on cities with higher income levels. This is consistent with the fact that higher incomes correlate with greater mobility in Brazil. Other city characteristics, such as the presence of slums and high residential crowding, also correlate with higher death rates per capita in Brazil. Nonetheless, these vulnerabilities do not appear to be driven by mobility differences, as people in cities with these characteristics had a greater propensity to stay home.
Rural-Urban Migration at High Urbanization Levels
with Matias Busso and Nicolás Herrera L.
Regional Science and Urban Economics, 2021.
This study assesses the empirical relevance of the Harris-Todaro model at high levels of urbanization — a feature that characterizes an increasing number of developing countries, which were largely rural when the model was created 50 years ago. Using data from Brazil, we compare observed and model-based predictions of the equilibrium urban employment rate of 449 cities and the rural regions that are the historic sources of their migrant populations. We find little support in the data for the most basic version of the model. However, extensions that incorporate labor informality and housing markets have much better empirical traction. Harris-Todaro equilibrium relationships are relatively stronger among workers with primary but no high-school education, and are more frequently found under certain conditions: when cities are relatively larger; and when associated rural areas are closer to the magnet city, and are populated to a greater degree by young adults, who are most likely to migrate.
What is Different About Urbanization in Rich and Poor Countries? Cities in Brazil, China, India, and the United States
with Ed Glaeser, Nina Tobio and Yurean Ma.
Journal of Urban Economics, 2017.
Are the well-known facts about urbanization in the United States also true for the developing world? We compare American metropolitan areas with analogous geographic units in Brazil, China, and India. Both Gibrat’s Law and Zipf’s Law seem to hold as well in Brazil as in the U.S., but China and India look quite different. In Brazil and China, the implications of the spatial equilibrium hypothesis, the central organizing idea of urban economics, are not rejected. The India data, however, repeatedly rejects tests inspired by the spatial equilibrium assumption. One hypothesis is that spatial equilibrium only emerges with economic development, as markets replace social relationships and as human capital spreads more widely. In all four countries, there is strong evidence of agglomeration economies and human capital externalities. The correlation between density and earnings is stronger in both China and India than in the U.S., strongest in China. In India the gap between urban and rural wages is huge, but the correlation between city size and earnings is more modest. The cross-sectional relationship between area-level skills and both earnings and area-level growth are also stronger in the developing world than in the U.S. The forces that drive urban success seem similar in the rich and poor world, even if limited migration and difficult housing markets make it harder for a spatial equilibrium to develop.
Working paper version
Featured in the NBER digest (May 2016)
Press: Citylab, LiveMint (2016, 2017), PBS
Working Papers
Gender and electoral incentives: Evidence from crisis response
with Clemence Tricaud
This paper provides new evidence on why men and women leaders make different choices. We first use a simple political agency model to illustrate how voters’ gender bias can lead reelection-seeking female politicians to undertake different policies. We then test the model’s predictions by exploring leaders’ responses to COVID-19. Assuming that voters expect policies to be less effective if decided by women, the model predicts that female politicians undertake less containment effort than male politicians when voters perceive the threat as low, while the opposite is true when voters perceive it as serious. Exploiting Brazilian close elections, we find that, early in the pandemic, female mayors were less likely to close non-essential businesses and female-led municipalities experienced more deaths per capita, while the reverse was true later on, once the health consequences materialized. These results are exclusively driven by mayors facing reelection and stronger in municipalities with greater gender discrimination.
Latest version: January 2025. Submitted.
Gender-Segmented Labor Markets and the Effects of Local Demand Shocks
Gender segmentation in the labor market is widespread. However, most existing studies of the effects of labor demand shocks on local economies assume away gender. In this paper, I show that local labor demand shocks can lead to different outcomes depending on whether they favor male or female employment. I develop a spatial equilibrium model that features gender segmented labor markets and joint mobility frictions, which predicts that couples are more likely to migrate in response to male opportunities. As a result, positive shocks to local labor demand for men lead to population growth, increases in female labor supply, and housing demand growth. Meanwhile, equivalent shocks to labor demand for women lead to smaller inflows of migrant workers, and labor force participation is a relatively more important margin of adjustment in this case. I find strong empirical support for the model’s predictions in the context of Brazil during 1991-2010. Comparing the effects of gender-specific labor demand shocks, I show that male shocks produce a higher migratory response and make localities more populated and expensive. These results imply that place-making policies that create jobs for females are more likely to benefit residents while those that create male jobs are more likely to benefit immigrants and landlords.
Latest version: December 2024
Local Education Spending and Migration: Evidence from a Large Redistribution Program
This paper examines the effects of public education budgets on schooling, migration, and local labor markets, using late 1990s FUNDEF program’s redistribution of education funds across Brazilian municipalities for identification. Using a cohort-exposure design, I find that doubling the education budget raised primary school completion by 1.4 percentage points and decreased the likelihood of individuals staying in their education locality by 0.5 percentage points among exposed cohorts. At the local labor market level, difference-in-differences estimates indicate that larger education budgets led to lower employment and wages, suggesting a “brain drain” effect that depressed local labor demand in the long run.
Latest version: November 2024. Submitted.
The younger age profile of COVID-19 deaths in developing countries
with Annabelle Fowler and Nicolás Herrera L.
This study assesses the empirical relevance of the Harris-Todaro model at high levels of urbanization — a feature that characterizes an increasing number of developing countries, which were largely rural when the model was created 50 years ago. Using data from Brazil, we compare observed and model-based predictions of the equilibrium urban employment rate of 449 cities and the rural regions that are the historic sources of their migrant populations. We find little support in the data for the most basic version of the model. However, extensions that incorporate labor informality and housing markets have much better empirical traction. Harris-Todaro equilibrium relationships are relatively stronger among workers with primary but no high-school education, and are more frequently found under certain conditions: when cities are relatively larger; and when associated rural areas are closer to the magnet city, and are populated to a greater degree by young adults, who are most likely to migrate.
Submitted
Rural Spillovers of Urban Growth
with Sam Asher, Idaliya Grigoryeva, and Paul Novosad
As cities in developing countries continue to grow rapidly, there is insufficient empirical evidence on how this affects growth in surrounding rural economies. We study the effects of shocks to labor demand in cities on village-level economic outcomes, using a new dataset with administrative data from multiple sources on the universe of urban and rural economies in India.