Temperature, Labor Reallocation, and Industrial Production: Evidence from India
- (pp. 101-24)
Abstract
To what degree can labor reallocation mitigate the economic consequences of weather-driven agricultural productivity shocks? I estimate that temperature-driven reductions in the demand for agricultural labor in India are associated with increases in nonagricultural employment. This suggests that the ability of nonagricultural sectors to absorb workers may play a key role in attenuating the economic consequences of agricultural productivity shocks. Exploiting firm-level variation in the propensity to absorb workers, I estimate relative expansions in manufacturing output in more flexible labor markets. Estimates suggest that, in the absence of labor reallocation, local economic losses could be up to 69 percent higher.Citation
Colmer, Jonathan. 2021. "Temperature, Labor Reallocation, and Industrial Production: Evidence from India." American Economic Journal: Applied Economics, 13 (4): 101-24. DOI: 10.1257/app.20190249Additional Materials
JEL Classification
- J23 Labor Demand
- L43 Legal Monopolies and Regulation or Deregulation
- L60 Industry Studies: Manufacturing: General
- O13 Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
- O14 Industrialization; Manufacturing and Service Industries; Choice of Technology
- Q54 Climate; Natural Disasters and Their Management; Global Warming
- Q56 Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
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