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The Impact of Temperature on Productivity and Labor Supply: Evidence from Indian Manufacturing

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  • E. Somanathan

    ()

  • Rohini Somanathan

    ()

  • Anant Sudarsan

    ()

  • Meenu Tewari

    ()

Abstract

This paper shows that high temperatures may reduce manufactur- ing output by lowering worker productivity via heat stress. Using an annual panel of manufacturing plants in India, and daily primary micro- data from case-study rms, we nd that (i) output in labor-intensive settings decreases at high temperatures by about 3 percent per degree Celsius (ii) workplace climate control may enable adaptation and (iii) sustained heat may reduce worker attendance.

Suggested Citation

  • E. Somanathan & Rohini Somanathan & Anant Sudarsan & Meenu Tewari, 2014. "The Impact of Temperature on Productivity and Labor Supply: Evidence from Indian Manufacturing," Working Papers id:6308, eSocialSciences.
  • Handle: RePEc:ess:wpaper:id:6308
    Note: Institutional Papers
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    References listed on IDEAS

    as
    1. Sanghamitra Das & Kala Krishna & Sergey Lychagin & Rohini Somanathan, 2013. "Back on the Rails: Competition and Productivity in State-Owned Industry," American Economic Journal: Applied Economics, American Economic Association, vol. 5(1), pages 136-162, January.
    2. Joshua Graff Zivin & Matthew Neidell, 2014. "Temperature and the Allocation of Time: Implications for Climate Change," Journal of Labor Economics, University of Chicago Press, vol. 32(1), pages 1-26.
    3. Joshua Graff Zivin & Matthew Neidell, 2012. "The Impact of Pollution on Worker Productivity," American Economic Review, American Economic Association, vol. 102(7), pages 3652-3673, December.
    4. Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2014. "What Do We Learn from the Weather? The New Climate-Economy Literature," Journal of Economic Literature, American Economic Association, vol. 52(3), pages 740-798, September.
    5. Maximilian Auffhammer & Solomon M. Hsiang & Wolfram Schlenker & Adam Sobel, 2013. "Using Weather Data and Climate Model Output in Economic Analyses of Climate Change," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 7(2), pages 181-198, July.
    6. Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2012. "Temperature Shocks and Economic Growth: Evidence from the Last Half Century," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(3), pages 66-95, July.
    7. Achyuta Adhvaryu & Namrata Kala & Anant Nyshadham, 2018. "The Light and the Heat: Productivity Co-benefits of Energy-saving Technology," NBER Working Papers 24314, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Alan Barreca & Karen Clay & Olivier Deschenes & Michael Greenstone & Joseph S. Shapiro, 2013. "Adapting to Climate Change: The Remarkable Decline in the U.S. Temperature-Mortality Relationship over the 20th Century," NBER Working Papers 18692, National Bureau of Economic Research, Inc.
    2. repec:pal:psaefp:978-3-030-14409-8 is not listed on IDEAS
    3. Benonnier, Theo & Millock, Katrin & Taraz, Vis P., 2019. "Climate change, migration, and irrigation," 2019 Annual Meeting, July 21-23, Atlanta, Georgia 291028, Agricultural and Applied Economics Association.
    4. repec:eee:jeborg:v:150:y:2018:i:c:p:432-445 is not listed on IDEAS
    5. Sharma, Smriti & Tarp, Finn, 2018. "Does managerial personality matter? Evidence from firms in Vietnam," Journal of Economic Behavior & Organization, Elsevier, vol. 150(C), pages 432-445.
    6. Zhang, Peng & Deschenes, Olivier & Meng, Kyle & Zhang, Junjie, 2018. "Temperature effects on productivity and factor reallocation: Evidence from a half million chinese manufacturing plants," Journal of Environmental Economics and Management, Elsevier, vol. 88(C), pages 1-17.
    7. Alan Barreca & Karen Clay & Olivier Deschenes & Michael Greenstone & Joseph S. Shapiro, 2016. "Adapting to Climate Change: The Remarkable Decline in the US Temperature-Mortality Relationship over the Twentieth Century," Journal of Political Economy, University of Chicago Press, vol. 124(1), pages 105-159.
    8. Francesco Lamperti & Giovanni Dosi & Mauro Napoletano & Andrea Roventini & Alessandro Sapio, 2018. "And Then He Wasn't a She: Climate Change and Green Transitions in an Agent-Based Integrated Assessment Model," LEM Papers Series 2018/14, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    9. Sharma Smriti & Nordman Christophe, 2018. "Pecuniary returns to working conditions in Viet Nam," WIDER Working Paper Series 72, World Institute for Development Economic Research (UNU-WIDER).
    10. S. Nazrul Islam & John Winkel, 2017. "Climate Change and Social Inequality," Working Papers 152, United Nations, Department of Economics and Social Affairs.
    11. repec:eee:jcecon:v:46:y:2018:i:4:p:889-905 is not listed on IDEAS
    12. repec:kap:enreec:v:72:y:2019:i:2:d:10.1007_s10640-017-0197-5 is not listed on IDEAS
    13. repec:kap:enreec:v:72:y:2019:i:1:d:10.1007_s10640-018-0268-2 is not listed on IDEAS
    14. repec:cup:endeec:v:23:y:2018:i:03:p:349-368_00 is not listed on IDEAS
    15. Mateo Salazar, 2017. "The Effects of Climate on Output per Worker: Evidence from the Manufacturing Industry in Colombia," Revista Desarrollo y Sociedad, Universidad de los Andes - CEDE, vol. 79(2), August.
    16. Colmer, Jonathan, 2018. "Weather, labor reallocation and industrial production: evidence from India," LSE Research Online Documents on Economics 88695, London School of Economics and Political Science, LSE Library.
    17. Teevrat Garg & Matthew Gibson & Fanglin Sun, 2019. "Extreme Temperatures and Time Use in China," Department of Economics Working Papers 2019-16, Department of Economics, Williams College.
    18. Fu, Shihe & Viard, Brian & Zhang, Peng, 2017. "Air Quality and Manufacturing Firm Productivity: Comprehensive Evidence from China," MPRA Paper 78914, University Library of Munich, Germany.
    19. Teevrat Garg & Matthew Gibson & Fanglin Sun, 2019. "Extreme Temperatures and Time Use in China," Department of Economics Working Papers 2019-16, Department of Economics, Williams College.
    20. Park, Jisung & Bangalore, Mook & Hallegatte, Stephane & Sandhoefner, Evan, 2018. "Households and heat stress: estimating the distributional consequences of climate change," Environment and Development Economics, Cambridge University Press, vol. 23(03), pages 349-368, June.
    21. Lollo, Niklas & O’Rourke, Dara, 2018. "Productivity, Profits, and Pay: A Field Experiment Analyzing the Impacts of Compensation Systems in an Apparel Factory," Institute for Research on Labor and Employment, Working Paper Series qt31c4j2hz, Institute of Industrial Relations, UC Berkeley.
    22. Jonathan Colmer, 2018. "Weather, Labor Reallocation and Industrial Production: Evidence from India," CEP Discussion Papers dp1544, Centre for Economic Performance, LSE.

    More about this item

    Keywords

    Indian manufacturing; temperatures; labour intensive; climate; workplace; worker attendance;

    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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