The impact of climate change on work: lessons for Developing Countries

What is the impact of climate change on labor? Reviewing the evidence, this paper finds five areas of potential impact. Climate change may have an immediate effect on labor demand, labor supply and time allocation, on-the-job productivity, and income and vulnerability among the self-employed. In the medium term, climate change may lead to a reallocation of labor across economic activities and across space. Impact estimates typically rely on fixed effect estimation. These estimates require care when interpreted as they typically reflect the short-term direct impact of past events and abstract from potential adaptation. The paper discusses emerging work trying to address this, analyzing the responses by firms, farms, households, and workers. Together, the existing evidence points toward six potential areas of government response. Potential labor policies include green jobs, green skills, labor-oriented adaptation, flexible work regulation, labor market integration, and social protection. The paper concludes by setting out avenues for future research in this field.

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