The impacts of extreme heat on wage losses: Evidence from the Chinese agri‐food industry

Abstract

This paper investigates the effects of extremely high temperatures on wage losses for workers in the Chinese agri‐food industry. Our estimated results suggest extreme heat is associated with a decrease in worker wages, and that these welfare losses could be attributed to the adverse impacts of extremely hot days on worker productivity. We also observe that, compared to male workers, female workers are more likely to bear wage losses when exposed to extremely hot weather. Furthermore, workers in private firms may experience more wage losses due to extremely hot days than those in other ownership types. Regarding the industry‐level heterogeneity analysis, we find that wage losses in the agri‐food manufacturing industry are more severe than those in the agri‐food processing industry, while no significant wage losses are observed in the beverages and alcohol industry. In the long term, wage losses induced by climate change are projected to rise by 10.93% under RCP8.5, if no extra adaptation actions are implemented. [EconLit Citations: O13, P46, Q54]