Analyzing the nonlinear impact of climate change on labor productivity in Sub-Saharan Africa

Climate change has detrimental effects on labor productivity and human life due to extreme weather. Heat exposure significantly reduces productivity and leads to economic costs. This study examines the impact of climate change on labor productivity using data from 29 sub-Saharan African countries from 1994 to 2018. The System Generalized Method of Moments (SGMM) approach was employed to estimate the study’s objectives. Findings of this study indicate that temperatures up to a comfort level increase labor productivity by 1.920% to 6.400%. A rise in temperature above the normal level leads to a decline in productivity by 1.980% to 3.370%. Additionally, increased precipitation is associated with a 0.540% rise in productivity, but continuous increases in precipitation cause a 6.920% decrease in labor productivity. The Lind and Mehlum U-test indicates the U-shaped nonlinear relationship between climatic factors and labor productivity. This study suggests the promotion of climate-responsive workplace designs and climate-conscious investments. These investments include heat-resistant workplaces with proper ventilation. Enhanced urban drainage that prevents flood-related disruptions.