Spatial Interactions Between Growth and Rural Unemployment, Considering Climate Variability in Brazil and Mexico (2012–2024)

Diego Andrés Cardoso López (), Jesús López Cabrera, Tatiana Isabel Caly Amador and Álvaro Luis Mercado Suárez
Additional contact information
Diego Andrés Cardoso López: Department of Economic, Administrative and Accounting Sciences, Los Libertadores University Foundation, Bogotá D.C. 110012, Colombia
Tatiana Isabel Caly Amador: Economics and Government, School of Finance, EAFIT University, Medellín 050013, Colombia
Álvaro Luis Mercado Suárez: Higher School of Public Administration (ESAP), Barranquilla 080013, Colombia

Economies, 2025, vol. 13, issue 11, 1-20

Abstract: This paper examines the relationship between economic growth and rural unemployment in Brazil and Mexico, incorporating the effects of climate variability and spatial interactions. Okun’s Law serves as the theoretical framework, and a dynamic spatial panel model is applied to estimate short-term causal effects. The analysis uses data from Brazil’s IBGE, Mexico’s INEGI, and the U.S. NCEI. The results indicate that Okun’s Law is only partially validated in Mexico, where lagged income growth reduces rural unemployment, while in Brazil, the relationship is not statistically confirmed. Climate variables also play a critical role: higher local temperatures reduce unemployment in Brazil and, with a lag, in Mexico, although temperature increases in neighboring regions raise unemployment in Mexico. Rainfall has a consistent positive effect on rural unemployment in both countries, highlighting the disruptive impact of extreme weather events. From a spatial perspective, no contemporaneous effects are observed. However, lagged spatial effects are negative in Brazil and positive in Mexico, suggesting different adjustment dynamics across territories. Overall, the findings reveal that climate variability influences the growth-unemployment nexus differently depending on the national context and temporal dimension. These results underscore the importance of designing public policies that integrate territorial coordination, address the differentiated impacts of climate variability, and strengthen the adaptive capacity and resilience of rural areas in Latin America.

Keywords: Okun’s Law; rural labor markets; climate variability; regional development; spatial dynamic panel models (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2227-7099/13/11/322/pdf (application/pdf)
https://www.mdpi.com/2227-7099/13/11/322/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jecomi:v:13:y:2025:i:11:p:322-:d:1791670

Access Statistics for this article

Economies is currently edited by Ms. Hongyan Zhang

More articles in Economies from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().