Job Displacement and Reallocation Failure: Evidence from Climate Shocks in Morocco

This paper investigates the effects of severe drought shocks in Morocco’s agriculture sector. Using a staggered difference-in-differences design, the estimates show that climatic shocks produced job displacement of about 6.5 percentage points for workers who were exposed to severe drought events. Overall, about 45 percent of these workers remained unemployed, generating a partial reallocation failure. The effects are significant only for severe and extreme shocks; they last for at least five years, and are more pronounced among females and the least educated workers.