Jonathan Colmer explores the effect increasing temperatures have on farmers and the occupational structure in India.
Jonathan Colmer finds that increases in temperature are associated with a reduction in agricultural production, average wages, and the share of workers engaged in agriculture. However, these changes are accompanied by an increase in workers in the manufacturing sectors, which sees a corresponding increase in manufacturing output. Hence, flexible labour markets and an expanding manufacturing sector can offset the economic losses due to weather-driven changes in the agricultural sector.