Natural Disasters and Labor Migration: Evidence from Nepal’s Earthquake

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The 2015 earthquake in Nepal affected approximately 8 million people, resulting in an economic loss of 10 billion US dollars. We exploit the quasi-random spatial and temporal nature of ground tremors to evaluate the impact of the 2015 earthquake on international labor migration per 100,000 population in Nepal. Using different sets of difference-in-differences research designs, we show that the number of work permits issued to Nepalese individuals for international migration decreased significantly in districts severely affected by the 2015 earthquake. Results further indicate that the effect of the earthquake on international labor migration is statistically significant and negative only among males. Together, these results provide strong evidence that natural disasters induce significant changes in labor market outcomes in a developing country setting.