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

Jonathan Colmer ()

American Economic Journal: Applied Economics, 2021, vol. 13, issue 4, 101-24

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 nonagricultural employment. This suggests that the ability of nonagricultural 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 percent higher.

JEL-codes: J23 L43 L60 O13 O14 Q54 Q56 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (46)

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Related works:
Working Paper: 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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DOI: 10.1257/app.20190249

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