The Poverty Impacts of Labor Heat Stress in West Africa Under a Warming Climate. Issue 11 (28th October 2022)

• Record Type: Journal Article
• Authors: Saeed, W.; Haqiqi, I.; Kong, Q.; Huber, M.; Buzan, J. R.; Chonabayashi, S.; Motohashi, K.; Hertel, T. W.
• Is Part Of: Earth's future. Volume 10:Issue 11(2022)
• Page Start: n/a
• Page End: n/a
• Publication Date: 2022-10-28
• Subjects: economic impacts -- heat stress‐related labor capacity losses -- poverty -- computable general equilibrium -- household microsimulations; Environmental sciences -- Periodicals; Environmental sciences; Periodicals; 550
• DOI: 10.1029/2022EF002777
• Languages: English
• ISSNs: 2328-4277

Abstract

Abstract: This paper assesses the poverty implications of heat stress‐related labor capacity losses based on simulations using a global general equilibrium economic model. Compared with past studies, we use a more precise measurement of heat stress, assign labor capacity losses to specific labor types by sector, and employ an economic model that contains highly disaggregated economic sectors and regions. This model allows us to determine global and regional economic impacts that account for international dependencies. We focus attention on seven West African countries for which we determine the implied changes in real incomes of households near the poverty line. For these countries, we use household microsimulations to determine potential impacts on the poverty headcount. In our results, poverty impacts are heterogeneous across countries and earning sources‐based household strata. A key channel behind this heterogeneity is how loss of labor productivity affects the relative returns to factors of production. We find that unskilled agricultural wages could increase, as loss of productivity in the face of inelastic food demand induces increased labor demand in order to dampen agricultural output losses. In our experiments, even neglecting potential increases in mortality and morbidity, poverty increases range from 2.3% in Cameroon to up to 7.2%–9.2% in Ghana and Nigeria. In one of the seven countries considered, Guinea, poverty sees little change due to the mitigating effects of rising labor wages. Plain Language Summary: With global warming, laborers will experience increasing heat stress and reduced capacity. This will cause economic losses, especially in sectors with high exposure in hot, humid regions. The uneven distributional implications of this, especially on lower‐middle income countries, are of special interest. Here, we assess the poverty implications of heat stress on labor globally but with an emphasis on seven West African countries. To estimate poverty impacts in West Africa, we construct global projections of future heat stress and associated labor capacity losses. Surveys of workers provide work intensity and outdoor exposure rates, allowing us to determine which type of workers in which sectors would be affected most. Using a global economic model, we assess the resulting impacts on production, GDP, prices, wages, and incomes. In turn, income changes determine poverty changes. Using recent survey data from seven West African countries, we determine how many households are pushed into poverty under a +3°C global warming scenario. Neglecting potential increases in mortality and morbidity rates, poverty increases in six countries by between 2.3% and 9.2%, while in one country, Guinea, there is little change. In Guinea, agricultural workers can see their wages increase due to increased demand aimed at mitigating food production losses. Key Points: In a global equilibrium economic model analysis, heat‐induced labor losses cause significant poverty impacts in West African countries Agricultural unskilled labor can see increased wage rates as demands for this type of labor increase in order to dampen food output losses Impoverished households' earning sources are key in determining the extent to which a country's poverty headcount is affected