Effect of Flood on Agricultural Wages in Bangladesh: An Empirical Analysis

SummaryThis paper analyzes the effects of riverine floods on agricultural wages in Bangladesh. Drawing upon the district-wise monthly data over 1979–2000, we model wages as a dynamic process. We find that floods have positive implications for wages in the long run. In flood months, however, agricultural wages decline in the inundated districts. We obtain difference-in-difference estimates to show that the magnitude of impact of flood depends on the relative flood proneness of a district and the relative severity of flood conditions. Our results indicate that favorable demand and supply conditions in the agricultural labor market can mitigate the impact of disasters on wages in Bangladesh.