Temperature and Farm Labor in Nigeria

ABSTRACT We estimate the impact of temperature shocks on the composition of farm labor in rural Nigeria using a nationally representative household panel survey. Leveraging plausibly exogenous year‐to‐year variation in growing season temperatures, we find that warmer temperatures significantly alter farm labor composition, prompting a substantial shift away from hired labor toward family labor. Interestingly, the displaced hired labor is not easily absorbed into non‐farm sectors in the short term; instead, high temperatures also reduce household participation in local non‐farm wage employment. We further provide suggestive evidence that households reallocate labor in response to temperature shocks because extreme heat renders reliance on external labor economically less viable. In particular, heat stress decreases farm productivity, lowering marginal returns to labor and incentivizing farmers to substitute costly hired labor with household labor. These findings underscore the multifaceted threat that climate change poses to rural livelihoods, reducing not only crop yields but also distorting labor allocation in ways that may further constrain farm productivity.