Research

Place-based policies and environmental shocks can have heterogeneous distributional effects, yet empirically assessing these consequences is difficult because inequality measures remain spatially coarse. We develop a satellite-based framework to measure neighborhood-level inequality in durable assets and propose a bottom-up aggregation scheme based on the Law of Total Variance to recover inequality for any policy-relevant geography. Using Mexico’s 2020 census data on 35 million households, we demonstrate that our approach recovers inequality across spatial scales with substantial accuracy, improving as predictions aggregate from neighborhoods to municipalities. We illustrate the method’s utility by constructing the first annual municipal panel of inequality (2017–2024). Using synthetic difference-in-differences, we estimate that a border-region tax-and-wage reform (the Northern Border Free Zone) reduced relative inequality by 0.18 standard deviations, while Hurricane Otis increased it by 0.13 standard deviations. We also find that while pre-existing inequality does not limit the benefits of progressive policy, it significantly amplifies vulnerability to adverse shocks.

Fine particulate matter (PM2.5) is a leading environmental cause of mortality. Droughts can worsen air quality in regions that rely on hydropower by shifting energy production to combustion power plants. This study quantifies drought-induced excess PM2.5 in Latin America and the Caribbean, where over 443 million people live within 50 km of a combustion power plant. Leveraging a monthly plant-level panel spanning 20 years, we link hydrological droughts, measured as negative runoff anomalies in hydropower watersheds, to changes in PM2.5 concentrations near combustion power plants. Our analysis reveals that these droughts lead to an average increase of 0.83 μg m-3 in PM2.5 levels. Counterfactual simulations for the region reveal that this excess PM2.5 results in up to 10,000 premature deaths annually. Combining our estimates with climate, demographic, and combustion power plant phase-out projections, we demonstrate that this health burden will persist over the next four decades without targeted interventions.

We study household credit responses to Hurricane Harvey using new, geographically granular data on credit cards, mortgages, and flooding. Estimates from a differences-in-differences design that exploits the flooding gradient show that affected households only borrow at low-interest rates, often using promotional (zero interest) cards and that they quickly pay down balances. We also document that take-up of forbearance (borrowing by missing mortgage payments without penalty) increases with flooding. These results are attenuated in floodplains, particularly in structures subject by code to physical hardening. Our results indicate that credit acts as a substitute for the lack of physical hardening.

Developing economies are not disproportionately exposed to natural disasters, but they experience significantly more deaths. Exploiting a discontinuity in the eligibility rules for Mexico’s indexed disaster fund (Fonden), I show that the accelerated reconstruction of public infrastructure can significantly mitigate the mortality impacts of disasters. Fonden’s impact is concentrated in areas with medical infrastructure and among conditions responsive to basic and freely available medical care. These findings suggest that Fonden operates by restoring access to health services. I also show that Fonden is cost-effective relative to other interventions and that its benefit–cost ratio is at least 3.2.

This paper studies the labor market effects of the most significant public health insurance expansion in the Americas: Mexico’s Seguro Popular (SP). To identify its impact, I exploit the staggered rollout of SP across municipalities. I find that SP increases labor supply by reducing the likelihood of informal workers exiting the labor market. This reduction is driven by women, who experience a 15% decrease in the probability of transitioning from informal employment to inactivity. I also find that this reduction is concentrated among female secondary earners residing in households with dependents. These findings suggest that SP may operate through a novel channel, namely that health insurance enables caregivers to continue working by reducing health shocks among dependents.

his paper evaluates whether mangroves can mitigate the impact of hurricanes on economic activity. The paper assembles a regionwide panel dataset that measures local economic activity using nightlights, potential hurricane damages using a detailed wind field model, and mangrove protection by mapping the width of mangrove forests on the path to the coast. The results show that hurricanes have negative short-run effects on economic activity, with losses likely concentrated in coastal lowlands that are exposed to both wind and storm surge hazards. In these coastal lowlands, the estimates show that nightlights decrease by up to 24% in areas that are unprotected by mangroves. By comparison, the impact of the hurricanes observed in the sample is fully mitigated in areas protected by mangrove belts of 1 km or more.

Government provision of disaster transfers is typically hampered by liquidity constraints and by weak rules and administrative capacity to disburse reconstruction resources. We show that by easing these hurdles, Mexico’s indexed disaster fund (Fonden) considerably accelerates economic recovery after a disaster. To estimate Fonden impact on recovery, as measured by night lights, we exploit the heavy rainfall index that determines program eligibility. We find that for one year after a disaster, eligible municipalities are 6 percent brighter than those ineligible, with gains likely concentrated among less resilient municipalities. We additionally document how Fonden rules shield resources from political abuse.

This paper is the first to examine the short term local economic impact of tropical cyclones by estimating the effects on monthly nightlight intensity. More specifically, for Guangdong Province in Southern China, we proxy monthly economic activity with remote sensing derived monthly night time light intensity and combine this with local measures of wind speed derived from a tropical cyclone wind field model. Our regression analysis reveals that there is only a significant (negative) impact in the month of the typhoon strike and nothing thereafter. Understanding that typhoons are inherently a short-term phenomenon has possible implications for studies using more aggregate data.