How effectively will economic agents adapt to future climate change? This study assesses the scope
for long-run adaptation to extreme heat stress, by exploiting variation in the labor productivity
impacts of hot days across different regions of the United States. Using a panel of county-level
payroll and daily temperature data (1986-2012), I quantify the causal impact of extreme heat days
on annual output, controlling for precipitation as well as county, year and state-by-year fixed effects.
For the average U.S. county, an additional day above 90°F results in a -0.048% decline in payroll
per capita that year. To measure adaptation, I assess heterogeneity in effect magnitudes across
counties, and find that regions more prone to extreme heat stress (e.g. Houston) exhibit significantly
lower temperature sensitivities than colder regions (e.g. Boston), suggesting significant scope for
adaptation. A year with 10 additional 90°F days reduces output per capita by -2.63% in counties in
the coldest quintile: -0.46%, or roughly one fifth that, in the warmest quintile.
Please note that this event will be held in the Oxford Man Institute lecture theatre, which is located on the 3rd floor of Eagle House.