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Do temperature shocks affect non-agriculture wages in Brazil? Evidence from individual-level panel data

Published online by Cambridge University Press:  05 April 2021

Jaqueline Oliveira*
Affiliation:
Rhodes College, Memphis, TN, USA
Bruno Palialol
Affiliation:
University of São Paulo, São Paulo, Brazil
Paula Pereda
Affiliation:
University of São Paulo, São Paulo, Brazil
*
*Corresponding author. oliveiraj@rhodes.edu

Abstract

The relationship between temperature and agriculture outcomes in Brazil has been widely explored, overlooking the fact that most of the country's labor force is employed in non-agriculture sectors. We use monthly individual-level panel data spanning the period from January 2015 to December 2016 to ask whether temperature shocks impact non-agriculture wages in formal labor markets. Our results show that additional days in a month that fall within high-temperature ranges have significant adverse effects on real wages. Assuming a uniform climate change scenario where the daily temperature distribution shifts by 2$^{\circ }$C, we calculate income losses for formal workers in non-agriculture markets equivalent to 0.12 per cent of 2015 GDP.

Type
Research Article
Copyright
Copyright © The Author(s), 2021. Published by Cambridge University Press

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