Agricultural Labor under Heat Stress: Productivity Shocks and Macroeconomic Consequences

Labor is one of the most crucial inputs in agricultural production, and its productivity is highly sensitive to the increasing heat stress. However, the role of labor has been overlooked in multisector dynamic models, and the agroeconomic and macroeconomic implications of heat stress shocks have not been fully explored. In this study, we leverage the recent development of GCAM-KLEAM, which integrates agriculture and land use systems with the macroeconomic module, to examine the impact of heat stress-induced (RCP6) labor productivity shocks. We illustrate how these labor productivity shocks ripple through agroeconomic and macroeconomic systems, leading to significant responses.