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Extreme Temperature Shocks And Labor Market Heterogeneity: Regional Evidence From Korea

Author

Listed:
  • SooJin Jo

    (Yonsei University)

  • Juntae Kim

    (Yonsei University)

  • Myungkyu Shim

    (Yonsei University)

Abstract

While the economic consequences of global warming have received growing attention, relatively little is known about how extreme temperatures affect labor market outcomes. This paper fills that gap by examining the impact of extreme temperature shocks on the Korean labor market using daily regional data from June 1999 to February 2024 and a panel local projection framework. Despite its relatively small geographic size, Korea exhibits substantial regional diversity in both climate and labor market conditions, providing a unique setting to study bidirectional temperature shocks within the same country. We find that, on average, extreme cold has a significantly negative effect on labor market indicators, while the effects of extreme heat are limited. Second, the impacts vary substantially by job characteristics and season, but not by key socio-demographic traits. Third, the labor market effects of extreme temperatures have become more negative in recent years, consistent with the progression of global warming.

Suggested Citation

  • SooJin Jo & Juntae Kim & Myungkyu Shim, 2025. "Extreme Temperature Shocks And Labor Market Heterogeneity: Regional Evidence From Korea," Working papers 2025rwp-242, Yonsei University, Yonsei Economics Research Institute.
    • Handle: RePEc:yon:wpaper:2025rwp-242
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    References listed on IDEAS

    as
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    Keywords

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    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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