Wednesday, August 29, 2018

Hot Temperatures Decrease Worker Productivity, Economic Output - A new study finds hot weather may cause significant global economic losses because workers are less productive when it is warm. Air conditioning may not solve the problem.

From Montreal, Canada to Mount Washington, New Hampshire, heat records are being broken this summer in places not accustomed to sweltering temperatures. Studies have found that unusually hot weather is linked to lower economic output in countries around the world. Although several factors—from poor crop yields to heat-related illnesses—probably share part of the blame, there is also a more fundamental variable at play: When we get hot, we find it difficult to work. 

“Because human physiology is the same whether you live in India, the United States or anywhere else in the world, the connection between hot temperatures and lower productivity has fundamental implications for how we should think about the costs of climate change going forward,” says Anant Sudarshan, the South-Asia Director at the Energy Policy Institute at the University of Chicago.  

In a new study, Sudarshan and his coauthors analyzed the productivity of workers in India, the world’s third largest economy. They looked at both labor-intensive and highly automated manufacturing processes. In the first category, they found that the productivity of workers engaged in cloth weaving or garment manufacturing dropped by as much as 4 percent per degree as temperatures rose above 27° Celsius (80.6° Fahrenheit). However, when studying workers in the steel industry who were operating in plants with highly automated production they found that productivity did not fall when it got hot outside. 
Daytime view of a more-or-less cone-shaped peak, perhaps reaching two hundred feet above the surrounding terrain. It is sparsely covered in poor-looking shrubs and trees; it otherwise reveals only an aspect of heated naked rock. Assorted parti-coloured blocky concrete buildings reach down from its lower slopes to a temple tank in the near foreground, around which is arrayed the more rounded and ornate temple structures.
Alwar, on the fringes of the Thar Desert, registered a temperature of 50.6 °C (123.1 °F), India's highest, until it was broken in May 2016 at Phalodi at 51.0 °C (123.8 °F), another town in the desert state of Rajasthan.
Heat did more than influence productivity at work. It also increased absenteeism. A one degree increase in the ten-day temperature average increased the probability that a worker would be absent by as much as 5 percent. Interestingly, this remained true even where the workplace used automation. Mechanization might reduce the effects of temperature on the shop floor, but may not solve the problem of employees missing work.

Less productive workers mean a less productive business, and a less productive economy. To determine if the declines in worker productivity decreased the output of factories, Sudarshan and his colleagues looked at data from almost 70,000 plants across India. They found that the value of output declined by about 3 percent for every degree above the average temperature. This loss is large enough to explain the entire reduction in India’s economic output in hot years

To adapt to hotter temperatures, businesses could install climate control measures such as air conditioning. Sudarshan and his coauthors collected data from a number of garment plants in the midst of a phased roll-out of shop floor cooling, providing the researchers with the opportunity to compare workers on the same day in nearby plants who did and did not have climate control. They found that workers in plants with climate control were more productive. But, the climate control measures didn’t remove absenteeism. 

“Air conditioning is expensive and poor countries are unlikely to move to universal cooling anytime soon. However, if cooling the workplace doesn’t prevent people from skipping work, then adapting to hotter temperatures will be difficult even in richer countries,” says Sudarshan. “In the long run, countries may need to prepare for bigger changes. Factories may decide to relocate to cooler regions or automate more of their work to compensate for the lost productivity. This may have wide-ranging impacts on employment rates and wages in areas that are already struggling to grow, and is clearly an important area for further research and policy attention.”

University of Chicago Energy Policy Institute of the University of Chicago (EPIC_
August 29, 2018

Also see:

Working Paper: "The Impact of Temperature on Productivity and Labor Supply: Evidence from Indian Manufacturing" by E. Somanathan, Rohini Somanathan, Anant Sudarshan, Meenu Tewari
Hotter years are associated with lower economic output in country-level data. We show that the effect of temperature on labor is an important part of the explanation. Using high-frequency micro data from selected firms in India, we find that worker productivity on hot days declines by 2 to 4 percent per degree celsius. Sustained heat also increases worker absenteeism. Using a national panel of manufacturing plants, we find similar temperature effects on output and show that these can be fully accounted for by reductions in the productivity of labor. Estimated effect sizes are consistent with studies that rely on country GDP panels.

No comments:

Post a Comment