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

Author

Listed:
  • E. Somanathan

    (Indian Statistical Institute, Delhi)

  • Rohini Somanathan

    (Delhi School of Economics)

  • Anant Sudarshan

    (University of Chicago)

  • Meenu Tewari

    (University of North Carolina, Chapel Hill)

Abstract

Cross-country studies have found that hotter years are associated with lower output in poor countries. Using high-frequency micro-data from manufacturing firms in India, we show that worker heat stress can substantially explain this correlation. Ambient temperatures have non-linear effects on worker productivity, with declines on hot days of 4 to 9 percent per degree rise in temperature. Sustained heat also increases absenteeism. Similar temperature induced productivity declines are replicated in annual plant output from a national panel. Our estimates imply that warming between 1971 and 2009 may have decreased manufacturing output in India by at least 3 percent relative to a no-warming counterfactual.

Suggested Citation

  • E. Somanathan & Rohini Somanathan & Anant Sudarshan & Meenu Tewari, 2015. "The Impact of temperature on productivity and labor supply: Evidence from Indian manufacturing," Discussion Papers 15-03, Indian Statistical Institute, Delhi.
    • Handle: RePEc:alo:isipdp:15-03
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    File URL: https://www.journals.uchicago.edu/doi/epdf/10.1086/713733
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    temperature; heat stress; worker productivity; climate change;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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