Climate change, labour availability and the future of gender inequality in South Africa

Abstract

Women in developing countries are more exposed to the adverse effects of climate change. We develop a structural model to study the long-term impacts of climate and socioeconomic changes on labour supply and the pay gap between male/female and high-skilled/low-skilled labour. We calibrate our model with empirical evidence on the impacts of increasing temperatures on labour availability in two general economic sectors with high and low exposure to rising temperatures. Using five waves of nationally representative micro-survey data in South Africa from 2008 to 2017, we find that while high-skilled labour availability is insensitive to climate change, higher temperatures have a negative impact on working hours of low-skilled labour specially among women in the high-exposure sector. We incorporate these findings in an overlapping generations (OLG) model to show that climate-induced reduction in labour availability increases the relative wages of low-skilled female labour and reduces the wage gap between male and female labour in the high-exposure sector, and between high-skilled and low-skilled female labour, in general. Considering climate change damages both on sectoral productivity and on labour availability, we project that by the end of the century, the output per adult will drop by about 11 percentage points under a severe climate scenario. This calls for more targeted adaptation policies that build on the potential benefits of climate change in reducing gender inequality and empowering women to take up more active roles in designing and implementing such policies at the local level.