Heat stress is expected to increase with climate change, negatively affecting workers’ productivity. We calculate Wet Bulb Globe Temperature to estimate heat stress under the shade and the sun for five climate models under two scenarios in Paraguay, a developing country particularly affected by heat. We use household survey data to estimate the share of the working-age population employed in agriculture and construction, industry and services. We use a standard workability-temperature loss function to estimate productivity losses attributed to climate change for the average worker in each sector. We find mean annual productivity losses of 3.7%, 1.1% and 0.2% per worker in each respective sector from 2020 to 2050. Those losses vary geographically and represent 2.1% of GDP. Adaptation could decrease this impact.

This is joint work with Matías Soria.