The Economic Cost of Heat Stress in Bangladesh's Ready-Made Garment Industry: Evidence on Productivity Loss, Medical Expenditure, and Absenteeism
DOI:
https://doi.org/10.18034/gdeb.v14i1.801Keywords:
Heat stress, Wet-bulb globe temperature, Ready-made garments, Productivity loss, Out-of-pocket expenditure, Absenteeism, Climate change, Occupational health economicsAbstract
The ready-made garment (RMG) sector is the second largest sector in the world in terms of employment in Bangladesh, which employs around 4-5 million people and generates more than 84% of the country's export earnings. While the evidence of economic and health effects of increasing temperature on the health and productivity of RMG workers are growing, there is no empirical study to quantify the total economic cost at the sector level due to heat stress. A cross-sectional study surveyed 400 production line workers in 20 factories in Dhaka, Gazipur and Narayanganj between March and September 2024 and assessed wet-bulb globe temperature (WBGT) and productivity loss, absenteeism and self-reported out of pocket (OOP) expenditure on heat-related illnesses. Multivariate ordinary least squares (OLS), Poisson regression and a two-part expenditure model were estimated. 92.3% of pre-monsoon working days in the factories experienced mean WBGT above the ISO 33°C action limit. For every 1°C increase in WBGT, there was a 1.82 percentage-point rise in self-reported productivity loss (p < .001) and a 0.54 percentage-point increase in absenteeism (p < .001). The mean annual OOP expenditure was estimated to be BDT 2,560 (USD 23.3) per worker related to heat. At the sector level, the total economic costs estimated for the whole year are BDT 31.14 billion (USD 283.1 million) or 9.24% of the wage bill of the sector. This is expected to increase to USD 476.4 million by 2030, under the RCP8.5 business-as-usual climate scenario. These findings highlight the importance of implementing WBGT-based heat standards in the International Accord framework, mandatory cooling infrastructure, and paid heat leave policies.
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