The industr...

The industrial revolution in developing countries represents an unfinished process. Urban centers, dominated by manufacturing and services, sit alongside rural hinterlands dominated by subsistence agriculture. This paper uses a 1957-2000 district-level panel data set to test whether hot weather shocks have unequal effects on mortality in rural and urban populations in India. This depends on the degree to which incomes are affected by weather shocks and the extent to which individuals can smooth their survival across these shocks. We find that a one standard deviation increase in high temperature days in a year decreases agricultural yields and real wages by 12.6 % and 9.8 %, respectively, and increases annual mortality among rural populations by 7.3 %. By contrast, in urban areas, there is virtually no evidence of an effect on incomes and a substantially smaller increase in the mortality rate (of about 2.8% for a one standard deviation increase in high temperature days). Importantly, we find that greater availability of credit mitigates the mortality effects of high temperatures in rural areas, presumably by facilitating consumption smoothing. Finally, with all else held constant, the estimates imply that global warming will lead to meaningful reductions in life expectancy i