Long-Term Impacts of High Temperatures on Economic Productivity

High temperature anomalies have recently been shown to have adverse impacts on multiple health and socio-economic outcomes. A well established literature on the impacts of early life stress on life-long human capital accumulation has led us to hypothesize that high temperature anomalies can have long-term impacts on economic productivity. Using data on historical weather and the earnings, place and date of birth of all 1.5 million formal employees in Ecuador, we find that women who have experienced a 1°C increase in average temperature while in-utero earn 1.1%-1.7% less as adults. The results are highly robust and suggest warming may already have caused adverse long-term economic losses “in the pipeline” that have not been appreciated to date.