IMF Working Papers

Using quarterly temperature and employment data between 1990 and 2021, this paper uncovers nuanced evidence on the impact of seasonal temperature within US counties: higher winter temperature increases private sector employment growth while higher summer temperature decreases it. The impacts of higher temperature in mild seasons, fall and spring, are statistically insignificant. Moreover, the negative impact of higher summer temperature persists while the positive impact of higher temperature in the winter is more short-lived. The negative effects of a hotter summer are pervasive and persistent in many sectors: most significantly in “Construction” and “Leisure and Hospitality” but also in “Trade, Transport, and Utilities” and “Financial Activities.” In contrast, the positive effects of a warmer winter are less pervasive. The employment effect of a hotter summer has been more severe in recent decades.