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Labor Economics, Energy & Environmental Economics: Will We Adapt? Temperature, Labor Productivity, and Adaptation to Climate Change in the United States

Jisung Park
Friday, October 13, 2017
1:00-2:30 PM
201 Lorch Hall Map

This study explores the labor-related production impacts of temperature stress both for its own interest and to understand the role of adaptation in responding to climate change. Focusing on non-agricultural output, we find that hot temperature exerts a significant causal impact on local labor product. Highly exposed industries such as construction and transportation exhibit substantially larger impacts, and places that experience more extreme heat exposure in expectation (e.g. Houston) experience lower impacts per hot day than cooler regions (e.g. Boston). A year with 10 additional 90F days would reduce output per capita in highly exposed sectors by -3.5% in counties in the coldest quintile and -1.3%, roughly a third, in the warmest quintile. County-level air-conditioning penetration explains a large proportion of these differences, though we cannot rule out other factors correlated with AC uptake. Failure to account for long-run adaptation to heat stress could result in over-estimating labor-related climate damages in 2040 by at least 23%, possibly 50% or more. While these estimates suggest workers and firms can adapt to heat stress in the long-run, they also imply realistic limits, at least given current technologies.
Building: Lorch Hall
Event Type: Workshop / Seminar
Tags: Economics, seminar
Source: Happening @ Michigan from Department of Economics, Energy & Environmental Economics, ISR-Zwerdling Seminar in Labor Economics, Department of Economics Seminars