Economic impact of labor productivity losses induced by heat stress: an agent-based macroeconomic approach

Christian Kimmich (), Klaus Weyerstrass, Thomas Czypionka, Norman FRM Fauster, Maurice Kinner, Elisabeth Laa, Liliana Mateeva, Kerstin Plank, Leonhard Ulrici, Hannes Zenz, Michael Miess and Sebastian Poledna
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Christian Kimmich: Institute for Advanced Studies
Thomas Czypionka: Institute for Advanced Studies
Norman FRM Fauster: Institute for Advanced Studies
Maurice Kinner: Institute for Advanced Studies
Elisabeth Laa: Institute for Advanced Studies
Liliana Mateeva: Institute for Advanced Studies
Kerstin Plank: Institute for Advanced Studies
Leonhard Ulrici: Institute for Advanced Studies
Hannes Zenz: Institute for Advanced Studies
Michael Miess: KAUST - King Abdullah University of Science and Technology
Sebastian Poledna: International Institute for Applied Systems Analysis

Climatic Change, 2025, vol. 178, issue 3, No 3, 21 pages

Abstract: Abstract Against the backdrop of rising temperatures, this paper analyzes how prolonged heat affects labor productivity and the corresponding macroeconomic outcomes, using Austria as a case study. While previous research primarily focused on specific industries or used industry aggregates, this study also considers inter-industrial economic connections. We assess the macroeconomic effects of an increase in seasonal heat stress triggered by climate change with an emphasis on (1) industry-specific work intensity and (2) the vulnerability to heat-induced impairments resulting in an industry-specific loss of labor productivity. To account for indirect and non-linear economic relationships, we apply an agent-based model of the Austrian economy, which translates heat-induced productivity losses into economy-wide effects via shocks to industry-related input-output structures on the level of economic agents. The findings highlight how in the scenario with the highest temperature increase, the largest average loss in real GDP amounts to 0.7% in the third year compared to the baseline scenario. The largest aggregate effect is found for investments in dwellings. In line with existing literature, industries most affected directly are those that perform intense work in the sun, such as agriculture and construction. Our methodological approach, model, and the corresponding EU data sources can serve as a blueprint for further comparative research.

Keywords: Agent-based model; Work intensity; Labor productivity; Climate change; Heat stress; Industry-disaggregated (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10584-025-03879-7

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