Climate Change Adaptation and Rural Out-Migration

A new NBER Working Paper documents that when crop yields decline due to weather shocks that young people move away from rural areas.   This finding is a 1st cousin of the recent trend that cattlemen are moving their herds away from Texas towards Northern areas (i.e Montana) receiving more rainfall (here was my blog post on this).  In both cases, migration plays a key role in helping us to adapt to climate change.  This was a big theme of my book Climatopolis.  No government here is involved.  Self interested individuals re-optimize.   A reasonable question to ask is; "what are the transition costs?"

In the case of young people moving away from the rural Corn Belt, such individuals are moving away from their friends and family.  This could be costly in terms of lost social networks but in this Facebook age, I am optimistic that such individuals can stay connected with their old way of life while seeking new opportunities at the location they choose to move to.

In the case of cattle migration, the question is how costly is it to put cattle in trucks and trains to move to Montana?   This is a transition cost. If the cattle live for years, then there is a present value stream of benefits that will be earned by those who pay these transition costs.  So, I acknowledge that adaptation isn't costless but these fun examples highlight our various strategies.

Let's return to the rural outflow of young people in areas experiencing climate shocks.  As young people leave, this will increase the wages and economic opportunities for those who remain.   Yes,  the climate shock lowers local labor demand but the out-migration reduces local labor supply so that wages return to their pre-shock levels.  This is the logic of Blanchard and Katz and their work on Regional Evolutions.