Association for Public Policy Analysis & Management

The influence of behavioral mechanisms and economic conditions underlying population mobility decisions is critical during periods of environmental change. We investigate the extent to which drought-induced increases in risk aversion and reductions in socioeconomic stats shape the migration decisions of rural households surveyed as part of the Thailand Vietnam Socio Economic Panel from 2007-2017. We integrate monthly high-resolution (0.25 degree) rainfall and (0.5 degree) temperature data from the Global Precipitation Climatology Centre and the GHCN Gridded V2, respectively, to characterize severe droughts. We find that consecutive years of severe drought decreases household engagement in migration by 3.4 percentage points. We show that consecutive severe droughts substantially increase risk aversion and erode socioeconomic status. Analysis of underlying mechanisms and heterogeneity highlights the mediating influence of socioeconomic status measured as per capita consumption and productive asset holdings, suggesting that migration outcomes of wealthier households are less sensitive to the adverse effects of droughts. This pattern is consistent with the presence of an environmentally-induced poverty trap, whereby exposure to climate shocks directly and indirectly (through increases in risk aversion and reductions in socioeconomic stats) reduces rural population mobility, particularly among poorer households.