Do temperature shocks affect non-agriculture wages in Brazil? Evidence from individual-level panel data. (5th October 2021)

• Record Type: Journal Article
• Authors: Oliveira, Jaqueline; Palialol, Bruno; Pereda, Paula
• Editors: Creti, Anna; Delacote, Philippe; Leblois, Antoine
• Is Part Of: Environment and development economics. Volume 26:Number 5/6(2021)
• Page Start: 450
• Page End: 465
• Publication Date: 2021-10-05
• Subjects: climate change -- temperature shocks -- formal labor markets -- labor productivity -- non-agriculture sector -- wages; C23 -- J24 -- Q54; Economic development -- Environmental aspects; 330.9
• DOI: 10.1017/S1355770X21000073
• Languages: English
• ISSNs: 1355-770X

Abstract

Abstract: The relationship between temperature and agriculture outcomes in Brazil has been widely explored, overlooking the fact that most of the country's labor force is employed in non-agriculture sectors. We use monthly individual-level panel data spanning the period from January 2015 to December 2016 to ask whether temperature shocks impact non-agriculture wages in formal labor markets. Our results show that additional days in a month that fall within high-temperature ranges have significant adverse effects on real wages. Assuming a uniform climate change scenario where the daily temperature distribution shifts by 2$^{\circ }$ C, we calculate income losses for formal workers in non-agriculture markets equivalent to 0.12 per cent of 2015 GDP.