Is Workplace Temperature a Valuable Job Amenity? Implications for Climate Change

Using data representing one-third of the world’s population, we find that extreme hot and cold days cause substantial labor supply declines for weather-exposed workers, but not for weather-protected workers. With these results and a simple theoretical framework, we calculate that the value of a weather-protected job’s thermal comfort varies widely globally but is worth 2.9% of annual income on average. We project that climate change will increase worker thermal discomfort by 1.8% of global GDP in 2099 under a very high emissions scenario and 0.5% under an intermediate scenario, demonstrating the importance of this new category of climate damages.