Job displacement and reallocation failure. Evidence from climate shocks in Morocco

Abstract

We investigate the impact of severe drought shocks in Morocco’s agricultural sector. Using a staggered difference-in-differences design, we estimate that climatic shocks resulted in a job displacement of approximately 6.5 percentage points for workers exposed to severe drought events. Additionally, we observe that, overall, approximately 39 per cent of these workers remained unemployed, leading to a partial reallocation failure. These effects are significant only for severe and extreme shocks, persist for at least 5 years, and are more pronounced among informal and female workers.