A STUDY ON ECONOMIC IMPACT OF CLIMATE CHANGE AS YOUTH UNEMPLOYMENT AND LABOUR PRODUCTIVITY LOSS IN TAMIL NADU

Abstract

Climate change is no longer solely an environmental challenge it has emerged as a critical labour market disruptor in the Global South. This study investigates the intersection of climate change and unemployment in Tamil Nadu. India second largest state economy and a front runner in renewable energy transition. Using mixed methods and secondary data from the Tamil Nadu Economic Survey current report a peer reviewed heat stress study of 1,560 outdoor workers across 11 districts Scientific Reports and industry reports on garment and MSME sectors the climate induced heat stress and inconsistent weather are actively exacerbating joblessness. While overall unemployment declined from 7.2 percent to 4.8 percent youth unemployment 15 to 29 years remains at 17.5 to 21.9 percent with graduate unemployment at 16.3 percent exceeding the national average of 14.0 percent. Tamil Nadu has achieved a positive structural shift with agricultural employment share reducing from 32 percent 2015 to 25 percent 2025 to 2026 but this transition is climate induced distress migration rather than productive transformation. The heat stress study provides empirical evidence 61 percent of outdoor workers reported productivity loss in summer versus 39 percent in winter. Exposure to important Wet Bulb Globe Temperature WBGT increased the risk of productivity loss by 1.40 times 95 percent CI and doubled the risk of heat related illness. In brick kilns and salt pans of Thoothukudi and Kanchipuram productivity defeat reach 65 percent. In the garment hub of Tiruppur employing over 3 million workers directly a 2026 climate risk analysis projects 35 million Full Time Equivalent FTE jobs at risk across Indian garment supply chains by 2030 due to unabated heat with 73 percent factories having heat trapping metal roofs and 60 percent lacking clinics. Micro, Small and Medium Enterprises MSME which contribute 30 percent to state GDP and are the largest employer reported 40 percent output loss during recent flood and heat events in stakeholder consultations held in February 2026. Simultaneously 90 percent of Tamil Nadu adults report experiencing global warming indicating high

awareness but low adaptive capacity due to informality 60 to 80 percent youth in informal jobs and skill mismatch only 25 to 49 percent deemed employable. Relatively Tamil Nadu situation mirrors trends in Bangladesh Vietnam and Mexico where heat reduces labour supply by 10 to 15 percent in peak summer. Though Tamil Nadu is unique as it already generates greater than 50 percent power from renewable and is investing Rs 15,000 crore in off shore wind in Gulf of Manner with green hydrogen integration  offering potential for 50,000 add green jobs in marine engineering and turbine maintenance. The study concludes with a five pillar policy framework (i) Heat adapted labour standards including WBGT based work rest cycles (ii) Formalization with climate insurance (iii) Climate smart skilling under Naan Mudhalvan for solar, wind, EV (iv) MSME resilience fund for cool roofs and (v) District Climate Employment Cells. The study contributes to the emerging literature on Climate presently Employment and provides actionable insights for South Asian economies navigating the dual transition.