Too Hot to Work? Exploring the Average and Seasonal Effects of Temperature Variability in the Philippine Labour Market

Using temperature and employment data covering 16 regions from Q3 2003 to Q1 2022, this study examined the average and seasonal effects of temperature on year-on-year employment growth in the Philippines. Average effects are insignificant, while seasonal effects are heterogeneous. During the dry and cool season (Q1), higher temperatures are associated with a temporary 0.0397% increase in employment growth. In contrast, higher temperatures in the dry and hot season (Q2) are associated with a persistent decrease of 0.1361%, while higher temperatures during the wet and hot season (Q3) are associated with a persistent increase of 0.1450%, which is primarily driven by the services sector. These relationships attenuate and become statistically insignificant once time-fixed effects are included, suggesting that labour market responses are driven primarily by large-scale climatic fluctuations rather than localized weather variation.