How do extremely high temperatures affect labor market performance? Evidence from rural China

To improve understanding of the labor market implications of climate change, this paper investigates how heat extremes affect individual-level labor market outcomes in rural China. By exploiting daily weather and household survey data during the period 1989-2011, we find that extremely high temperatures significantly reduce rural laborers' working hours and wages but have no statistically significant effect on their employment status. In addition, the adverse effects of extremely high temperatures on the service sector and on female workers could be long-lasting. To attenuate the detrimental effects of temperature shocks, rural laborers may perform adjustment behaviors to reduce direct exposure to high-temperature working environments, including leaving agricultural primary occupations and engaging in non-agricultural secondary occupations.