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Do Firms Mitigate Climate Impact on Employment? Evidence from US Heat Shocks / Viral V. Acharya, Abhishek Bhardwaj, Tuomas Tomunen.

NBER Working papers Available online

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Format:
Book
Author/Creator:
Acharya, Viral V.
Contributor:
National Bureau of Economic Research.
Bhardwaj, Abhishek.
Tomunen, Tuomas.
Series:
Working Paper Series (National Bureau of Economic Research) no. w31967.
NBER working paper series no. w31967
Language:
English
Physical Description:
1 online resource: illustrations (black and white);
Place of Publication:
Cambridge, Mass. National Bureau of Economic Research 2023.
Summary:
How do firms mitigate the impact of rising temperatures on employment? Using establishment-level data, we show that firms operating in multiple counties in the United States respond to heat shocks by reducing employment in the affected locations and increasing it in unaffected locations, whereas single-location firms simply downsize. Workforce reallocation, aimed at preventing heat-related decline in labor productivity, is stronger among larger, financially stable firms with more ESG-oriented investors. The scale of this response increases with the severity of climate disasters and is aided by credit availability and competitive labor markets. Climate risk management by firms mitigates the impact of heat shocks on aggregate employment but induces a spatial redistribution of economic activity.
Notes:
Print version record
December 2023.

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