Let the water do the work: climate adaptation policies and labor market outcomes

Abstract

The provision of clean water is a key factor for poverty reduction and economic development. This study uses a difference-in-differences research design to evaluate the impact of a water policy in Brazil that distributed cisterns for water storage to poor families in rural areas on labor market outcomes. Our findings show that receiving a cistern had a positive impact on the probability of getting formal jobs and increased the wages of beneficiaries. The effect was stronger for jobs with longer commuting times, indicating that access to clean water can help reduce time spent on daily chores and increase labor force participation. Our results provide evidence of the important role that water policies can play in reducing poverty and promoting economic development, particularly in rural areas with limited access to clean water.