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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
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    References listed on IDEAS

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    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.

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