HDR Candidate: Salonkara Chaudhuri 

Title: Essays on Natural Disaster and Labour Market

Time and date: 2-4pm, Tuesday 1 February 2022

Zoom linkhttps://uqz.zoom.us/j/7996679807 



The thesis presents a comprehensive study of the impact of natural disasters on the labour market.

The first essay uses a partial equilibrium framework to determine the role of credit market distortion in the migration of workers from natural disaster-prone places in the presence of public assistance. The results indicate the presence of a threshold level of credit market distortion beyond which workers are compelled to out-migrate from their places of origin in the event of the occurrence of a natural disaster. My analysis indicates that policies aimed towards providing credit at a lower rate of interest and making formal credit more accessible will be effective in decreasing the rate of environmental out-migration. This will be possible due to the increase in the critical of credit market distortion because of these policies.

The second essay uses a stylized two-sector general equilibrium framework to explore whether natural disaster has an influence on the ratio of manufacturing to agricultural wage in an economy. It empirically tests the validity of the theoretical results by using inter-state data from India and inter-country data from European Union countries. The aim of this chapter is also to identify how natural disaster impacts developing and developed countries differently which is yet to be done. The preliminary results suggest that natural disaster has an impact on the intersectoral wage inequality, and it largely depends on the various parameters of the economy. The empirical results are in line with the theoretical results obtained.

The third essay which is yet to be written will use a stylized three-sector general equilibrium framework to show how natural disasters can lead to alterations in the urban unemployment situation in developing countries. Even in the presence of informal sector, urban unemployment exists due to the downward wage rigidity in the urban formal sector. The increased rural to urban migration of workers in a post-disaster scenario is likely to impact the levels of sectoral employment and urban unemployment and thus will be an interesting exercise to investigate.