The Impact of Climate Change on Agricultural Employment, Evidence from South Asian Countries based on Pooled Mean Group Estimation of Dynamic Heterogeneous Panel

Abstract

Being the most populous region, South Asia is home to one-fourth of the population in the world. Along with the aforementioned feature, South Asia is becoming one of the most climatic-hazard-prone regions on the planet. Hence, this study attempts to analyse empirically how economic performance and climate change affect employment in the agriculture sector. The study includes seven South Asian countries’ data, excluding the Maldives, from 1992 to 2021 by applying the most widely used Panel ARDL, which involved pooled mean group (PMG) estimation. In the short run, the effect of past-year employment and temperature is positive, whereas GDP per capita is negatively related to agricultural employment and rainfall is insignificant. However, in the long run, the error correction coefficient is significant, and overall data has been able to establish a long-run relationship. The study concludes that, with the long-run impact for each country, agricultural employment is negatively affected by GDP per capita and temperature. Lastly, the effect of temperature in the long run reveals that climate change has long-term impacts on agriculture employment. We believe that the findings of the study have important implications for policymakers in the future.