Heat, Mortality, and Life-Cycle Welfare

Jannik Reinbold and Thomas Steger

No 12885, CESifo Working Paper Series from CESifo

Abstract: Climate change increases the frequency and severity of extreme heat. We develop a stochastic life-cycle model at annual frequency in which daily heat shocks raise mortality risk, agents adapt to protect themselves, and health investment slows biological aging. We calibrate the model to U.S. data and study a key damage channel—heat-induced mortality—showing how exogenous differences in wage income translate common heat shocks into a markedly unequal burden. Comparing life-cycle outcomes under daily heat-shock distributions associated with SSP5-8.5 to an SSP1-2.6 benchmark, the average agent loses 0.07 years of life expectancy, with a regressive incidence: 0.26 years (3.1 months) for the bottom decile versus 0.04 years (0.5 months) for the top, a ratio of six to one. Welfare losses are substantial and likewise regressive: 0.80% in CEV on average, ranging from 1.32% to 0.52%, and from 6.65% to 1.11% conditional on survival to age 50. Climate denial raises welfare losses most among the rich.

Keywords: daily heat shocks; mortality; adaptation; biological aging; life-cycle model; welfare; Incidence; climate denial (search for similar items in EconPapers)
JEL-codes: D15 D63 I14 J17 Q54 (search for similar items in EconPapers)
Date: 2026
New Economics Papers: this item is included in nep-age, nep-env and nep-hea
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