Temperature, Labor Reallocation, and Industrial Production: Evidence from India

Jonathan Colmer (j.colmer@virginia.edu)

No 14604, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: To what degree can labor reallocation mitigate the economic consequences of weather-driven agricultural productivity shocks? I estimate that temperature-driven reductions in the demand for agricultural labor in India are associated with increases in non-agricultural employment. This suggests that the ability of non-agricultural sectors to absorb workers may play a key role in attenuating the economic consequences of agricultural productivity shocks. Exploiting firm-level variation in the propensity to absorb workers, I estimate relative expansions in manufacturing output in more flexible labor markets. Estimates suggest that, in the absence of labor reallocation, local economic losses could be up to 69% higher.

Keywords: labor reallocation; industrial production; temperature (search for similar items in EconPapers)
JEL-codes: F16 J21 O13 Q56 (search for similar items in EconPapers)
Pages: 127 pages
Date: 2021-07
New Economics Papers: this item is included in nep-dev, nep-eff and nep-isf
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (42)

Published - published in: American Economic Journal: Applied Economics, 2021, 13 (4), 101 - 124

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Related works:
Journal Article: Temperature, Labor Reallocation, and Industrial Production: Evidence from India (2021)
Working Paper: Temperature, labor reallocation and industrial production: evidence from India (2018)
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