International migration is a recurrent phenomenon that has grown rapidly over the past two decades. This paper examines the role of agricultural distortions in shaping emigration patterns and influencing productivity and welfare in developing countries, using Guatemala as a case study. We develop a theoretical framework where household members can work in agriculture, non-agriculture, or emigrate, and calibrate the model combining detailed micro and aggregate data. Our model identifies two key channels through which agricultural distortions affect migration and productivity: a first channel where distortions increase emigration among more productive agents, reducing aggregate productivity, and a second channel where distortions drive factor misallocation, lowering incomes and increasing overall emigration. Quantitatively, reducing agricultural distortions to the most efficient department in each region would lower the share of emigrants by 2.3 percentage points, primarily among more productive workers. Lower distortions would similarly boost aggregate agricultural productivity by 30.1% and raise median household welfare by 4.5%. An analysis at the sub-national level reveals that high-distortion areas are more isolated and exhibit less financial penetration and government presence.

This paper studies the impact of climate change on international migration. Using census data from Guatemala, we document novel evidence suggesting that areas affected by elevated temperatures exhibit less migration in the following year. The magnitude is larger in rural areas. We postulate that in the short run, years with higher-than-usual temperatures reduce rural productivity, decreasing migration from credit-constrained workers who need to pay migration costs. In this context, climate change’s effects are two-sided. While declining rural productivity makes migration more appealing, it also makes it increasingly difficult to pay the migration cost. We build a dynamic incomplete-markets migration model with credit-constrained workers and migration costs where elevated temperatures affect rural productivity. We estimate the effect of elevated temperatures on crop yields and then estimate the model to match the temperature-migration link we document. We project rural productivity for different climate change scenarios. We show that migration slowly increases for all scenarios as low-income workers need to start saving to migrate. Additionally, we find that transfers providing insurance against elevated temperatures reduce migration under all scenarios. Counterintuitively, although the weather-contingent transfers help pay the migration cost, its insurance effect makes staying more appealing.

This paper examines how climate change will affect food prices across regions and people across the income distribution, emphasizing the uneven effects on agricultural productivity. As climate change
shifts comparative advantages in food production, trade frictions limit adaptive sourcing. These frictions induce local sourcing, making food prices dependent on local productivity and increasing prices everywhere. Low-income households, with higher food expenditure shares, are particularly vulnerable to local food price increases. We develop a spatial macro trade model that incorporates income heterogeneity and two types of food goods with different trade frictions, allowing us to decompose welfare losses stemming from climate change into food expenditure shares, trade shares, and productivity changes. Using Brazilian data, we estimate intra-national trade shares using short-term weather shocks, price changes, and driving times between states. We find that trade frictions for fresh food are twice as sensitive to driving time relative to commodities, which face lower trade costs. Counterfactuals based on productivity forecasts indicate substantial welfare losses, with the lowest income decile in the most affected states willing to forgo 3% of income to avoid projected productivity declines. Improving road infrastructure could mitigate these effects, with low-income households in some states willing to pay up to 0.8% of their income for a 10% increase in the average driving speed.