Development Economics
14 March 2022

Households’ labour market responses to negative shocks

Labour market participation is one of the main channels through which households can respond to negative shocks, by migrating to another area or expanding to other labour sectors. In her recent PhD essays, Anna B. Kis explores household adaptation in the context of sub-Saharan Africa and Mexico, analysing three different adverse shocks: climate change, an increase in violence, and restrictions in social policy.

How did you become interested in studying how households use labour market participation to respond to negative shocks? 

I have always really enjoyed discussing research ideas with friends and colleagues. This is also how the original idea of what later became our paper “Safer at Home? Human Capital Decisions in Low-Intensity Conflicts: The Case of the Mexican War on Drugs” with Dante Sanchez Torres first materialised. The situation in Mexico kept appearing on the news, and I was interested in his take as a Mexican on the war’s implications for children. Although it might seem trivial that children are adversely impacted by high exposure to violence, we soon realised that the exact nature and magnitude of this adverse impact has not yet been explored in the Mexican context. This motivated us to start this research together, combining our interests and focusing on violence’s impact on children’s participation on the labour market and their educational performance.

How did you go about measuring this impact? 

Since 2007, Mexico witnessed a striking increase in criminal violence related to drug-trafficking activities. Our research explores the impact of these drug-related crimes on children’s education and labour market participation. As opposed to the approach followed by previous literature, we recognise that households make simultaneous decisions about children’s education and employment. We set up a theoretical framework to analyse whether high exposure to violence has an impact on how much time children spend in school, in employment or at home. While schools are relatively safe spaces, many children commute to work through dangerous areas or work in unsafe conditions. We show that the differences in the risks associated with various activities are likely to influence parents’ decisions about the children.

In our empirical approach, we use the heterogeneity of the war in time and space (across municipalities) to identify the impact on children. Following large drug seizures in Colombia and Ecuador, the main suppliers of Mexican drug traffickers, violence in Mexico tends to escalate. This is especially true in municipalities bordering the United States (the main market of Mexican drug traffickers); when drug scarcity after seizures raises prices, it becomes more valuable for cartels to control areas close to the border, intensifying violence.

What are the major findings of this PhD essay?

Our first main finding is that household decisions are greatly influenced by the riskiness of the respective activities. As cartels do not specifically target schools (in most cases), education is considered a relatively safe activity, and children in high-homicide municipalities have similar school participation rates to those in low-homicide ones, ceteris paribus. On the other hand, work is much riskier, especially considering the long commute necessary in many large cities. We show that in more violent conditions, children are indeed less likely to be employed. As they are perceived to be most vulnerable, it is especially girls and very young boys who stop working or reduce working hours in response to high homicide rates.

We also show that while there is no impact of violence on school participation per se, children’s cognitive development suffers in other ways from being surrounded by war. Young people who were already performing poorly in school experience a further drop in their Spanish test scores if they are exposed to high homicide rates. These students are often from low-income families and low-income neighbourhoods, and letting them lag behind can contribute to an escalation of educational and income inequalities. Even more so if some of them, lacking the necessary skills for employment, later become attracted to drug-trafficking or other crime-related activities. 

Can you tell us about your other essays?

In “Access to Childcare and Female Labor Market Participation in Mexico”, I evaluate the impact of the cancellation of a Mexican childcare programme. To encourage women from low-income households to work, the programme had provided access to state-supported nurseries for mothers with children younger than 4 years old. While the programme had some initial success, it was discontinued due to lack of funding. I show that the cutoff of this benefit had very strong negative effects on the mothers. As soon as they lost access to state-supported childcare, many of them were either forced to leave employment, or to compromise on job quality, sacrificing stable jobs for more flexible ones, in order to be able to take care of their children.

In “Climate Change, Natural Disasters and Migratory Flows: New Evidence from Sub-Saharan Africa” (co-authored with Prof. Martina Viarengo and Prof. Salvatore Di Falco), we examine the impact of droughts on labour migration decisions in sub-Saharan Africa. As rural households practice subsistence agriculture, they rarely have access to any form of insurance against climate shocks. If someone from the household moves to an urban area for work, then the support from that person can act as a safeguard to protect the household in times of failing agricultural yields. We show that all recent severe rainfall shortages that significantly damage crops accelerate migration from rural areas. Moreover, we find evidence that even droughts that happened 5 years before can influence household decisions about migration. As climate change frequently and repeatedly exposes agricultural households to adverse climate shocks, adaptation becomes very difficult, and rural-urban migration is expected to accelerate.

What are you doing now?

At the moment, I am working as a consultant for the World Bank. I am involved in a project that analyses the impact of the COVID-19 pandemic on girls in sub-Saharan Africa. Our main research question is how the pandemic affected adolescent girls’ lives, including their decisions about marriage, sexual and reproductive health, education and employment.

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Anna B. Kis defended her PhD thesis in Development Economics in November 2021. Professor Jean-Louis Arcand presided the committee, which included Associate Professor Martina Viarengo, thesis director, Ms Joëlle Noailly, Lecturer, and Professor Simone Moriconi, Department of Economics and Quantitative Methods, IÉSEG School of Management, Paris La Défense.

Citation of the PhD thesis:
B. Kis, Anna. “Three Essays in Development and Labor Economics.” PhD thesis, Graduate Institute of International and Development Studies, Geneva, 2022.
Members of the Graduate Institute can access the PhD thesis on this page of the repository. Others may contact Dr B. Kis at

Read here a related CESifo working paper on “Cumulative Climate Shocks and Migratory Flows: Evidence from Sub-Saharan Africa”.

Banner picture: excerpt from an illustration by carlos.araujo/
Interview by Nathalie Tanner, Research Office.