Internal labor migration as a shock-coping strategy: Evidence from a typhoon

The aim of this paper is to analyze how internal labor migration facilitates shock-coping in rural economies, using the example of Vietnam. Employing highly precise satellite data, the authors identify objective variations in the inundations generated by the most severe typhoon in Vietnam for decades, and match this treatment with a household panel survey before and after the shock. They find that, following the massive drop in income, households achieve to cope mainly through internal labor migration to urban areas: households with settled migrants ex-ante receive more remittances. Non-migrant households react by sending new members away for work who earn less than established migrants, but remit similar amounts in the short term.