Economics & Finance / Macroeconomics / Economic Growth & GDP

Why India's Economy Crashes Every Hot Year: The Hidden Cost of Heat on Workers

Ever wonder why developing countries suffer economically during heatwaves? This video breaks down a groundbreaking study from the Journal of Political Economy that reveals the shocking truth: for every 1°C temperature increase, India's manufacturing output drops by 2.1%. Using data from thousands of factories, researchers E. Somanathan, Rohini Somanathan, Anant Sudarshan, and Meenu Tewari discovered that heat doesn't just make workers uncomfortable—it slashes productivity and skyrockets absenteeism. Air conditioning helps on the job but can't solve the real problem: workers get sick and stay home. This isn't just about comfort; it's about billions in lost GDP. Watch to understand why climate change is an economic crisis, and what it means for the future of work in hot countries.