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Assessment of the economic impact of heat-related labor productivity loss: a systematic review

Abstract

Heat stress caused by climate change and heat-related labor productivity losses have become global concerns. Estimating the economic impacts of heat stress is of great significance for employers, as well as sectoral and national policy makers who are searching for solutions to reduce productivity losses. As the value of economic impacts are sensitive to the research methodologies, we conducted a systematic review of published literature on the methodologies and results of economic impacts of heat on labor productivity. Four methods were summarized: the human capital (HC) method, the econometric method (EM), the input–output (IO) method, and the computable general equilibrium (CGE) model. Considering adaptation measures, global economic losses due to heat-related labor productivity losses are projected to range from 0.31% (0.14–0.5%, RCP2.6) to 2.6% (1.4–4%, RCP8.5) of global GDP in 2100. The published studies found that large economic losses occurred mainly in South and Southeast Asia, Sub-Saharan Africa, and Central America. Owing to different methodologies and considerations of adaptation measures, the disparities of results within the same area at a given time can be as high as 7.4-fold. We summarized the knowledge gaps in existing studies and proposed new directions to provide more targeted and reliable results for policy makers.

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Acknowledgments

This work was jointly funded by the National Key R&D Program of China (2017YFA0603602), National Natural Science Foundation of China (NO. 72091514,71773061), a donation from Delos China (HK) Limited, sponsored by the Tsinghua-Toyota Joint Research Fund, and supported by the National Research Foundation, Prime Minister’s Office, Singapore under its Campus for Research Excellence and Technological Enterprise (CREATE) programme, and a research grant from the NUS Initiative to Improve Health in Asia (NIHA) coordinated by the Global Asia Institute of the National University of Singapore and supported by the Glaxo Smith Kline-Economic Development Board (Singapore) Trust Fund. Any opinions, findings and conclusions or recommendations expressed in this study are those of the authors and do not reflect the views of the National University of Singapore, Singapore and the National Research Foundation, Singapore.

Funding

This work was jointly funded by the National Key R&D Program of China (2017YFA0603602), National Natural Science Foundation of China (NO. 72091514,71773061), a donation from Delos China (HK) Limited, sponsored by the Tsinghua-Toyota Joint Research Fund, and supported by the National Research Foundation, Prime Minister’s Office, Singapore under its Campus for Research Excellence and Technological Enterprise (CREATE) programme, and a research grant from the NUS Initiative to Improve Health in Asia (NIHA) coordinated by the Global Asia Institute of the National University of Singapore and supported by the Glaxo Smith Kline-Economic Development Board (Singapore) Trust Fund. Any opinions, findings and conclusions or recommendations expressed in this study are those of the authors and do not reflect the views of the National University of Singapore, Singapore and the National Research Foundation, Singapore.

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All authors contributed to the study conception and design. All authors conceived of the presented idea. MZ carried out the literature search. JKWL, TK, and WC inspected the literature to ensure no relative studies ignored. The first draft of the manuscript was written by MZ and all authors commented on previous versions of the manuscript. All authors read and approved the final manuscript.

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Correspondence to Wenjia Cai.

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Zhao, M., Lee, J.K.W., Kjellstrom, T. et al. Assessment of the economic impact of heat-related labor productivity loss: a systematic review. Climatic Change 167, 22 (2021). https://doi.org/10.1007/s10584-021-03160-7

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Keywords

  • Climate change
  • High temperature
  • Labor capacity
  • Economic assessment