Do energy prices affect employment? Decomposed international evidence

This paper analyzes the energy price-employment nexus and contributes to the literature by showing that it is important to decompose the regulatory effect into demand, cost, and factor-shift effects. This is done by means of a cross-country multi-sectoral dataset. The results show that both rising energy prices and shadow prices of energy have no significant effect on net employment when the manufacturing sectors only are analyzed. While finding significant variations across countries, the average employment effects become significantly positive once jobs in the economy as a whole are considered. This change is driven mainly by larger positive cost effects, which more than offset the negative demand effects and reductions in the positive factor-shift effects. Moreover, the paper reveals that the often implemented approach of using a simple regulation regressor, instead of decomposing the employment effect, can result in biased estimates.     

Temperature effects on mortality and household adaptation: Evidence from China

This paper examines the effects of extreme temperatures on mortality rates, using random year-to-year variation in temperature based on county-level panel data from China. The analysis finds a robust, U-shaped relationship between temperature and mortality rates, indicating that extremely cold or hot temperatures lead to excess deaths. The heat-related (cold-related) effect is 3.5 times (3.2 times) as large as previous findings that used U.S. data, and it is especially large for the elderly population, mainly due to excess deaths caused by cardiovascular diseases. Applying these results to climate change predictions from Hadley Centre Global Environmental Model shows that by 2061–2080 the annual mortality rate is likely to increase by 14.2% if global greenhouse gas emissions continue to rise throughout the 21st century, the estimated health cost of which is around 0.98 trillion Chinese Yuan per year. The paper also explores households’ adaptation behaviors to extreme temperatures. It finds that although urban households adaptively increase energy consumption when they are exposed to cold temperatures and purchase more air conditioners on hot and cold days, rural households are unresponsive to temperature fluctuations. This finding implies that rural people may be more resource constrained and suffer more when extreme temperatures occur.