When the Rain Stops Falling : Effects of Droughts on the Tunisian Labor Market (English)

This paper investigates the effects of severe drought shocks on Tunisia's agriculture sector during 2000-19. Using labor force surveys aligned with granular weather data, it calculates the Standardized Potential Evapotranspiration Index to detect moderate-to-severe drought shocks at the governorate level and frames the analysis in a staggered difference-in-differences setting. The findings show that shocked areas experience a drop of 7.4 to 10.6 percentage points in agricultural employment with respect the untreated or not-yet-treated governorates. There is a contemporaneous opposite dynamic in the employment rate of low-skill and less climate-sensitive sectors, as well as a modest and transient increase in unemployment. The effects are largely heterogeneous across groups of workers, with very young individuals, women, and low-educated workers paying the highest toll.