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Flooded jobs: income development after the 2007 Tabasco flood

ABSTRACT Disasters are becoming more frequent events that affect an increasing share of the world population each year. In this paper I examine the economic effects of the 2007 flood in Tabasco, Mexico. Using the geographical coverage of the flood and detailed labour information I demonstrate that the flood caused an immediate decline in work income for the affected population. This result is mainly driven by an increase in the number of, predominantly male, workers that continue to work after the flood but now earn less than the minimum wage. The agricultural sector experienced the most severe income decline, although I find no changes in sectoral composition. Using night light as a proxy for economic activity I find no effects of the flood, which indicates that returns rather than activity levels were affected.