This seminar is hosted by the Institute for New Economic Thinking at the Oxford Martin School
Speaker: Jisung Park, Department of Economics, Harvard University
Abstract: How effectively will economic agents adapt to future climate change? This seminar assesses the scope for long-run adaptation to extreme heat stress, by exploiting variation in the labour productivity impacts of hot days across different regions of the United States. Using a panel of county-level payroll and daily temperature data (1986-2012), I quantify the causal impact of extreme heat days on annual output, controlling for precipitation as well as county, year and state-by-year fixed effects. For the average US county, an additional day above 90°F results in a -0.048% decline in payroll per capita that year. To measure adaptation, I assess heterogeneity in effect magnitudes across counties, and find that regions more prone to extreme heat stress (e.g. Houston) exhibit significantly lower temperature sensitivities than colder regions (e.g. Boston), suggesting significant scope for adaptation. A year with 10 additional 90°F days reduces output per capita by -2.63% in counties in the coldest quintile: -0.46%, or roughly one fifth that, in the warmest quintile.