The impact of temperature on productivity and labor supply: Evidence from Indian manufacturing

E. Somanathan, Rohini Somanathan, Anant Sudarshan and Meenu Tewari

No 912, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: Hotter years are associated with lower economic output in developing countries. We show that the effect of temperature on labor is an important part of the explanation. Using microdata from selected firms in India, we estimate reduced worker productivity and increased absenteeism on hot days. Climate control significantly mitigates productivity losses. In a national panel of Indian factories, annual plant output falls by about 2% per degree Celsius. This response appears to be driven by a reduction in the output elasticity of labor. Our estimates are large enough to explain previously observed output losses in cross-country panels.

Keywords: Temperature; warming; labor productivity; labor supply (search for similar items in EconPapers)
JEL-codes: J22 J24 Q54 Q56 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-dev, nep-eff, nep-env and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (146)

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Related works:
Journal Article: The Impact of Temperature on Productivity and Labor Supply: Evidence from Indian Manufacturing (2021)
Working Paper: The Impact of temperature on productivity and labor supply: Evidence from Indian manufacturing (2015)
Working Paper: THE IMPACT OF TEMPERATURE ON PRODUCTIVITY AND LABOR SUPPLY - EVIDENCE FROM INDIAN MANUFACTURING (2015)
Working Paper: The Impact of Temperature on Productivity and Labor Supply: Evidence from Indian Manufacturing (2015)
Working Paper: The Impact of Temperature on Productivity and Labor Supply: Evidence from Indian Manufacturing (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:912

DOI: 10.4419/96973056

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