Research insights: What are the effects of weather-induced rural-urban migration on destinations’ labor and housing markets?

The researchers study the long-run effects of weather-induced rural migration to cities in Brazil. While much of the literature on economic effects of weather shocks has focused on local labor markets, the research jointly consider both urban labor markets and urban housing markets.

The study found out that cities that received more migrants observed faster growth in employment and a slower increase in wages. The wage effects are stronger in the service sector, likely due to its higher degree of labor informality. The stock of precarious housing units increased in cities receiving more rural migrants, rents for this type of housing did not increase, suggesting that supply kept pace with migration-driven growth in demand.