The effects of Temperature Variability on Sectoral Labour Productivity in African countries
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2025-07-07
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en
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The economic impact of climate change has been studied extensively, particularly in relation to rising average temperatures. However, the role of temperature variability (daily temperature variability) remains understudied, despite emerging evidence of its negative impact on human capital and productivity outcomes. This study examines the relationship between temperature variability and sectoral labour productivity in African countries over time (1995–2017). Two different measures of temperature variability are constructed based on daily temperatures as done by Linsenmeier (2023) and Hovdahl (2022). The empirical strategy uses two-way fixed-effects panel models, using annual panel data from the World Bank and the Global Data Lab. The analysis includes in-depth additional subgroup analyzes based on sector, climate zone, and other climatic and socioeconomic characteristics. The findings suggest that temperature variability negatively affects productivity, particularly in sectors exposed to outdoor conditions, such as agriculture and utilities. These effects are stronger in tropical climates (with generally higher average temperatures and higher humidity) and low-income countries with limited urbanization. Although not all results are statistically significant, the results indicate structural vulnerability to temperature variability. This study contributes to the broader literature on the effects of climate change on broader development by highlighting temperature variability as a specific and relevant factor in adverse effects on economic outcomes, which warrants targeted, climate-sensitive policy responses in terms of adaptation capacity given the presence of heterogeneity across sectors and the broader climate and socio-economic characteristics across countries.
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Faculteit der Managementwetenschappen