IDEAS home Printed from https://ideas.repec.org/a/spr/climat/v167y2021i1d10.1007_s10584-021-03160-7.html
   My bibliography  Save this article

Assessment of the economic impact of heat-related labor productivity loss: a systematic review

Author

Listed:
  • Mengzhen Zhao

    (Tsinghua University)

  • Jason Kai Wei Lee

    (National University of Singapore
    National University of Singapore
    National University of Singapore
    National University of Singapore)

  • Tord Kjellstrom

    (Health and Environment International Trust
    Australian National University)

  • Wenjia Cai

    (Tsinghua University)

Abstract

Heat stress caused by climate change and heat-related labor productivity losses have become global concerns. Estimating the economic impacts of heat stress is of great significance for employers, as well as sectoral and national policy makers who are searching for solutions to reduce productivity losses. As the value of economic impacts are sensitive to the research methodologies, we conducted a systematic review of published literature on the methodologies and results of economic impacts of heat on labor productivity. Four methods were summarized: the human capital (HC) method, the econometric method (EM), the input–output (IO) method, and the computable general equilibrium (CGE) model. Considering adaptation measures, global economic losses due to heat-related labor productivity losses are projected to range from 0.31% (0.14–0.5%, RCP2.6) to 2.6% (1.4–4%, RCP8.5) of global GDP in 2100. The published studies found that large economic losses occurred mainly in South and Southeast Asia, Sub-Saharan Africa, and Central America. Owing to different methodologies and considerations of adaptation measures, the disparities of results within the same area at a given time can be as high as 7.4-fold. We summarized the knowledge gaps in existing studies and proposed new directions to provide more targeted and reliable results for policy makers.

Suggested Citation

  • Mengzhen Zhao & Jason Kai Wei Lee & Tord Kjellstrom & Wenjia Cai, 2021. "Assessment of the economic impact of heat-related labor productivity loss: a systematic review," Climatic Change, Springer, vol. 167(1), pages 1-16, July.
    • Handle: RePEc:spr:climat:v:167:y:2021:i:1:d:10.1007_s10584-021-03160-7
    DOI: 10.1007/s10584-021-03160-7
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10584-021-03160-7
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10584-021-03160-7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. 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.
    2. Elshennawy, Abeer & Robinson, Sherman & Willenbockel, Dirk, 2016. "Climate change and economic growth: An intertemporal general equilibrium analysis for Egypt," Economic Modelling, Elsevier, vol. 52(PB), pages 681-689.
    3. Saudamini Das, 2015. "Temperature Increase, Labor Supply And Cost Of Adaptation In Developing Economies: Evidence On Urban Workers In Informal Sectors," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 6(02), pages 1-24.
    4. Roberto Roson & Dominique Van der Mensbrugghe, 2012. "Climate change and economic growth: impacts and interactions," International Journal of Sustainable Economy, Inderscience Enterprises Ltd, vol. 4(3), pages 270-285.
    5. Cattaneo, Cristina & Peri, Giovanni, 2016. "The migration response to increasing temperatures," Journal of Development Economics, Elsevier, vol. 122(C), pages 127-146.
    6. Achyuta Adhvaryu & Namrata Kala & Anant Nyshadham, 2020. "The Light and the Heat: Productivity Co-Benefits of Energy-Saving Technology," The Review of Economics and Statistics, MIT Press, vol. 102(4), pages 779-792, October.
    7. Roberto Roson & Martina Sartori, 2016. "Estimation of Climate Change Damage Functions for 140 Regions in the GTAP 9 Database," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 1(2), pages 78-115, December.
    8. Zander, Kerstin K. & Mathew, Supriya, 2019. "Estimating economic losses from perceived heat stress in urban Malaysia," Ecological Economics, Elsevier, vol. 159(C), pages 84-90.
    9. Yuqiang Zhang & Drew T. Shindell, 2021. "Costs from labor losses due to extreme heat in the USA attributable to climate change," Climatic Change, Springer, vol. 164(3), pages 1-18, February.
    10. V. Mueller & C. Gray & K. Kosec, 2014. "Heat stress increases long-term human migration in rural Pakistan," Nature Climate Change, Nature, vol. 4(3), pages 182-185, March.
    11. Roberto Roson & Dominique Van der Mensbrugghe, 2012. "Climate change and economic growth: impacts and interactions," International Journal of Sustainable Economy, Inderscience Enterprises Ltd, vol. 4(3), pages 270-285.
    12. Nina Knittel & Martin W. Jury & Birgit Bednar-Friedl & Gabriel Bachner & Andrea K. Steiner, 2020. "A global analysis of heat-related labour productivity losses under climate change—implications for Germany’s foreign trade," Climatic Change, Springer, vol. 160(2), pages 251-269, May.
    13. Gulcan Cil & Trudy Ann Cameron, 2017. "Potential Climate Change Health Risks from Increases in Heat Waves: Abnormal Birth Outcomes and Adverse Maternal Health Conditions," Risk Analysis, John Wiley & Sons, vol. 37(11), pages 2066-2079, November.
    14. Marco Morabito & Alessandro Messeri & Alfonso Crisci & Junzhe Bao & Rui Ma & Simone Orlandini & Cunrui Huang & Tord Kjellstrom, 2020. "Heat-related productivity loss: benefits derived by working in the shade or work-time shifting," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 70(3), pages 507-525, April.
    15. Hübler, Michael & Klepper, Gernot & Peterson, Sonja, 2008. "Costs of climate change: The effects of rising temperatures on health and productivity in Germany," Ecological Economics, Elsevier, vol. 68(1-2), pages 381-393, December.
    16. Cai, Xiqian & Lu, Yi & Wang, Jin, 2018. "The impact of temperature on manufacturing worker productivity: Evidence from personnel data," Journal of Comparative Economics, Elsevier, vol. 46(4), pages 889-905.
    17. Rob Dellink & Elisa Lanzi & Jean Chateau, 2019. "The Sectoral and Regional Economic Consequences of Climate Change to 2060," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 72(2), pages 309-363, February.
    18. Banerjee, Rakesh & Maharaj, Riddhi, 2020. "Heat, infant mortality, and adaptation: Evidence from India," Journal of Development Economics, Elsevier, vol. 143(C).
    19. Leontief, Wassily, 1970. "Environmental Repercussions and the Economic Structure: An Input-Output Approach," The Review of Economics and Statistics, MIT Press, vol. 52(3), pages 262-271, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Uchechukwu Jarrett & Yvonne Tackie, 2024. "Re‐examining the effect of heat and water stress on agricultural output growth: How is Sub‐Saharan Africa different?," Agricultural Economics, International Association of Agricultural Economists, vol. 55(3), pages 515-530, May.
    2. Conte Grand Mariana & Soria Matias, 2023. "Economic Costs Of Heat Stress Induced Reductions In Worker Productivity Due To Climate Change In A Developing Country," Asociación Argentina de Economía Política: Working Papers 4636, Asociación Argentina de Economía Política.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Feriga, Moustafa & Lozano Gracia, Nancy & Serneels, Pieter, 2024. "The Impact of Climate Change on Work Lessons for Developing Countries," IZA Discussion Papers 16914, Institute of Labor Economics (IZA).
    2. Gabriele Standardi, 2023. "Exploring market-driven adaptation to climate change in a general equilibrium global trade model," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 28(2), pages 1-29, February.
    3. Tol, Richard S.J., 2024. "A meta-analysis of the total economic impact of climate change," Energy Policy, Elsevier, vol. 185(C).
    4. Jaqueline Oliveira & Bruno Palialol & Paula Pereda, 2021. "Do temperature shocks affect non-agriculture wages in Brazil? Evidence from individual-level panel data," Working Papers, Department of Economics 2021_13, University of São Paulo (FEA-USP).
    5. Clark Gray & Douglas Hopping & Valerie Mueller, 2020. "The changing climate-migration relationship in China, 1989–2011," Climatic Change, Springer, vol. 160(1), pages 103-122, May.
    6. Moustafa Feriga & Mancy Lozano Gracia & Pieter Serneels, 2024. "The impact of climate change on work lessons for developing countries," CSAE Working Paper Series 2024-02, Centre for the Study of African Economies, University of Oxford.
    7. Song, Malin & Wang, Jianlin & Zhao, Jiajia, 2023. "Effects of rising and extreme temperatures on production factor efficiency: Evidence from China's cities," International Journal of Production Economics, Elsevier, vol. 260(C).
    8. Roson, Roberto & Damania, Richard, 2016. "Simulating the Macroeconomic Impact of Future Water Scarcity an Assessment of Alternative Scenarios," Conference papers 332687, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    9. Nguyen, Cuong Viet & Nguyen, Manh-Hung & Nguyen, Toan Truong, 2022. "Climate Change, Cold Waves, Heat Waves, and Mortality: Evidence from a Lower Middle-Income Country," GLO Discussion Paper Series 1034, Global Labor Organization (GLO).
    10. Chepeliev, Maksym & van der Mensbrugghe, Dominique, 2017. "Global Energy Subsidies Reform: Inclusive Approaches to Welfare Assessment," Conference papers 332821, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    11. Valeria Costantini & Anil Markandya & Elena Paglialunga & Giorgia Sforna, 2018. "Impact and distribution of climatic damages: a methodological proposal with a dynamic CGE model applied to global climate negotiations," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 35(3), pages 809-843, December.
    12. Hua Liao & Chen Zhang & Paul J. Burke & Ru Li & Yi‐Ming Wei, 2023. "Extreme temperatures, mortality, and adaptation: Evidence from the county level in China," Health Economics, John Wiley & Sons, Ltd., vol. 32(4), pages 953-969, April.
    13. Théo Benonnier & Katrin Millock & Vis Taraz, 2019. "Climate change, migration, and irrigation," PSE Working Papers halshs-02107098, HAL.
    14. Naveen Kumar & Dibyendu Maiti, 2024. "The Dynamic Causal Impact of Climate Change on Economic Activity - A Disaggregated Panel Analysis of India," Working papers 345, Centre for Development Economics, Delhi School of Economics.
    15. Teotónio, Carla & Rodríguez, Miguel & Roebeling, Peter & Fortes, Patrícia, 2020. "Water competition through the ‘water-energy’ nexus: Assessing the economic impacts of climate change in a Mediterranean context," Energy Economics, Elsevier, vol. 85(C).
    16. Wei, Xiahai & Li, Jianan & Liu, Hongyou & Wan, Jiangtao, 2023. "Temperature and outdoor productivity: Evidence from professional soccer players," Journal of Asian Economics, Elsevier, vol. 87(C).
    17. Roson, Roberto & Damania, Richard, 2017. "The macroeconomic impact of future water scarcity," Journal of Policy Modeling, Elsevier, vol. 39(6), pages 1141-1162.
    18. Roberto Roson & Richard Damania, the World Bank, Washington D.C., 2016. "Simulating the Macroeconomic Impact of Future Water Scarcity," EcoMod2016 9167, EcoMod.
    19. Kilian Kuhla & Sven Norman Willner & Christian Otto & Leonie Wenz & Anders Levermann, 2021. "Future heat stress to reduce people’s purchasing power," PLOS ONE, Public Library of Science, vol. 16(6), pages 1-17, June.
    20. Chen, Fanglin & Zhang, Xin & Chen, Zhongfei, 2023. "Behind climate change: Extreme heat and health cost," Structural Change and Economic Dynamics, Elsevier, vol. 64(C), pages 101-110.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:climat:v:167:y:2021:i:1:d:10.1007_s10584-021-03160-7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.