Labor market impacts and responses: The economic consequences of a marine environmental disaster

Abstract

This paper examines the aggregate and distributional labor-market impacts of a large-scale marine environmental crisis caused by an industrial pollution in Vietnam. Combining labor force surveys with a novel satellite data on fishing-boat detection, the analysis finds negative and heterogeneous impacts on fishery incomes and employment, and uncovers interesting coping patterns. Satellite data suggest that the affected upstream fishers traveled north to unaffected area to continue fishing. These individuals thus bore a lower income damage. The affected downstream fishers, instead, were more likely to reduce fishing hours and work secondary jobs. The paper also finds evidence on a gradual decline in the damages on fishing intensity and fishery incomes, and a positive labor-market spillover to freshwater fishery.