Extreme Temperature Shocks And Labor Market Heterogeneity: Regional Evidence From Korea

SooJin Jo, Juntae Kim and Myungkyu Shim
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SooJin Jo: Yonsei University
Juntae Kim: Yonsei University

No 2025rwp-242, Working papers from Yonsei University, Yonsei Economics Research Institute

Abstract: While the economic consequences of global warming have received growing attention, relatively little is known about how extreme temperatures affect labor market outcomes. This paper fills that gap by examining the impact of extreme temperature shocks on the Korean labor market using daily regional data from June 1999 to February 2024 and a panel local projection framework. Despite its relatively small geographic size, Korea exhibits substantial regional diversity in both climate and labor market conditions, providing a unique setting to study bidirectional temperature shocks within the same country. We find that, on average, extreme cold has a significantly negative effect on labor market indicators, while the effects of extreme heat are limited. Second, the impacts vary substantially by job characteristics and season, but not by key socio-demographic traits. Third, the labor market effects of extreme temperatures have become more negative in recent years, consistent with the progression of global warming.

Keywords: Climate change; Extreme Temperature; Labor Market Dynamics (search for similar items in EconPapers)
JEL-codes: C33 E24 J3 Q54 (search for similar items in EconPapers)
Pages: 39pages
Date: 2025-04
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