Publication details
Impact of climate change on labor market dynamics: Evidence from Kazakhstan
| Authors | |
|---|---|
| Year of publication | 2025 |
| Type | Article in Periodical |
| Magazine / Source | AGRICULTURAL ECONOMICS |
| MU Faculty or unit | |
| Citation | |
| web | https://onlinelibrary.wiley.com/doi/10.1111/agec.70073 |
| Doi | https://doi.org/10.1111/agec.70073 |
| Keywords | employment; agriculture; climate change; remote sensing data |
| Description | We analyze the impact of droughts on labor market indicators across sectors and land types, using Kazakhstan's confidential quarterly firm-level data, which covers 56% of total employment, over 190,000 firms, and 3 million individuals, along with remote sensing datasets to identify drought events. This dataset spans 2012Q1 - 2022Q4, allowing us to measure detailed employment outcomes while overcoming common data limitations in studying agricultural dynamics and labor market responses to climate shocks. Employing a novel difference-in-differences estimation technique, we account for the recurring nature of climate shocks. Our findings reveal that droughts lead to an immediate and significant decline in employment growth and job creation across sectors. The impact on agricultural employment peaks at a 5% reduction in the second quarter after a drought, while non-agricultural sectors also experience disruptions. The most vulnerable districts - those experiencing at least three drought shocks - face a decline in employment growth after a drought. However, they also show resilience, with strong recovery starting in the fourth quarter. These results highlight the broader economic implications of droughts, demonstrating that climate shocks extend beyond agriculture and affect overall labor market stability. |