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  3. American Economic Journal: Economic Policy
  4. May 2023
  5. Climate Change and Labor Reallocation: Evidence from Six Decades of the Indian Census

American Economic Journal:
Economic Policy

ISSN 1945-7731 (Print) | ISSN 1945-774X (Online)

Climate Change and Labor Reallocation: Evidence from Six Decades of the Indian Census

  • Maggie Liu
  • Yogita Shamdasani
  • Vis Taraz
American Economic Journal: Economic Policy
vol. 15, no. 2, May 2023
(pp. 395–423)
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Abstract

How do rising temperatures affect long-term labor reallocation in developing economies? In this paper we examine how increases in temperature impact structural transformation and urbanization within Indian districts between 1951 and 2011. We find that rising temperatures are associated with lower shares of workers in nonagricultural sectors, with effects intensifying over a longer time frame. Supporting evidence suggests that local demand effects play an important role: declining agricultural productivity under higher temperatures reduces the demand for nonagricultural goods and services, which subsequently lowers nonagricultural labor demand. Our results illustrate that rising temperatures limit sectoral and rural-urban mobility for isolated households.

Citation

Liu, Maggie, Yogita Shamdasani, and Vis Taraz. 2023. "Climate Change and Labor Reallocation: Evidence from Six Decades of the Indian Census." American Economic Journal: Economic Policy, 15 (2): 395–423. DOI: 10.1257/pol.20210129

Additional Materials

JEL Classification

  • J61 Geographic Labor Mobility; Immigrant Workers
  • N35 Economic History: Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy: Asia including Middle East
  • O13 Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
  • O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration
  • O18 Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
  • Q54 Climate; Natural Disasters and Their Management; Global Warming
  • R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
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