Heat causes large earnings losses for informal-sector workers in India

Abstract Heat reduces labor productivity and output in formal manufacturing but little is known about its impacts on the earnings and welfare of workers in the informal sector that comprise 82% of the labor force in low-income and lower-middle-income countries. This study reports the results from daily surveys of nearly 400 workers in two slums in Delhi for a month in the summer of 2019. Every degree Celsius increase in wet bulb temperature was associated with a fall in gross earnings of <mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML" overflow="scroll"> <mml:mrow> <mml:mn>13</mml:mn> <mml:mo stretchy="false">(</mml:mo> <mml:mo>±</mml:mo> <mml:mn>3.5</mml:mn> <mml:mo stretchy="false">)</mml:mo> </mml:mrow> </mml:math> percentage points, a fall in earnings net of work-related expenditure of <mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML" overflow="scroll"> <mml:mrow> <mml:mn>19</mml:mn> <mml:mo stretchy="false">(</mml:mo> <mml:mo>±</mml:mo> <mml:mn>4.5</mml:mn> <mml:mo stretchy="false">)</mml:mo> </mml:mrow> </mml:math> percentage points, an increase in the self-reported probability of sickness of the worker or a family member of <mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML" overflow="scroll"> <mml:mrow> <mml:mn>6</mml:mn> <mml:mo stretchy="false">(</mml:mo> <mml:mo>±</mml:mo> <mml:mn>0.5</mml:mn> <mml:mo stretchy="false">)</mml:mo> </mml:mrow> </mml:math> percentage points, and a decrease in the probability that a worker went to work of <mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML" overflow="scroll"> <mml:mrow> <mml:mn>2</mml:mn> <mml:mo stretchy="false">(</mml:mo> <mml:mo>±</mml:mo> <mml:mn>0.5</mml:mn> <mml:mo stretchy="false">)</mml:mo> </mml:mrow> </mml:math> percentage points. Net earnings were 40% lower during the two heatwaves that occurred during the study period. Over 320 million informal-sector workers in low-income and lower-middle-income countries are currently exposed to temperatures similar to those observed in this study.