I present a simple model to reconcile different findings in the prior climate-employment literature, incorporating roles for trade openness and intersectoral switching costs. Using Vietnamese data, I provide new evidence consistent with the model’s predictions. In most places, heat induces an outflow of workers from agriculture to non-agriculture in both the short and long terms. While all workers are equally likely to take an informal non-agricultural job, younger individuals incur lower costs and comprise most of those moving into formal non-agriculture. In places less integrated into global markets, the reallocation runs in the opposite direction due to general equilibrium effects.

This paper reviews the feedbacks between structural transformation and agriculture, on the one hand, and climate and the natural environment, on the other. The longstanding, dominant economic development narrative largely ignores nature’s influence on factor productivity and stocks, even as it increasingly illustrates how agricultural technological change and economic growth affect nature. We articulate some of the missing linkages and pose a range of policy research questions worth exploration concerning structural transformation and the complex feedback among agriculture, nature, and economic growth processes, especially in the low-income agrarian nations of the Global South.

This paper provides a new explanation for ethnic disparities in education and health in Vietnam by studying the relationship between frequent, small-scale adverse rainfall shocks and child human capital. Exploiting plausibly random year-to-year variation in weather data that are linked to a longitudinal household- and individual-level dataset over the period 2008–2017, I find that excess rainfall during the annual typhoon season results in lower child subjective health status and school enrollment, with disproportionate effects on children of ethnic minorities. The negative lagged effects on education are concentrated in children at primary school start age, suggesting delaying children’s school entry is a shock–coping strategy for poor ethnic minority households, albeit with potentially big negative long-run effect on their child lifetime earnings. Estimates suggest that rainfall shocks can explain approximately 28% of the observed ethnic gap in enrollment rates of children age 16–18 in the sample during the study period, and most is due to heterogeneous effects of rainfall shocks among ethnic groups, not differences in exposure to rainfall shocks.

Ungated Version

We combine nationally representative household and labor force survey data from 1992 to 2016 to provide a detailed description of rural labor market evolution and how it relates to the structural transformation of rural Vietnam, especially within the agricultural sector. Our study adds to the emerging literature on structural transformation in low-income countries using micro-level data and helps to answer several policy-related questions. We find limited employment creation potential of agriculture, especially for youth. Rural-urban real wage convergence has gone hand-in-hand with increased diversification of the rural economy into the non-farm sector nationwide and rapid advances in educational attainment in all sectors’ and regions’ workforce. Minimum wage laws seem to have played no significant role in increasing agricultural wages. This enhanced integration also manifests in steady attenuation of the longstanding inverse farm size-yield relationship. Farming has remained securely household-based and the family farmland distribution has remained largely unchanged. Small farm sizes have not obstructed mechanization nor the uptake of labor-saving pesticides, consistent with factor substitution induced by rising real wage rates. As rural households rely more heavily on the labor market, human capital accumulation (rather than land endowments) have become the key correlate of improvements in rural household well-being.