Heat waves swept the globe this summer—including in places you wouldn’t expect. Belfast, Ireland; Montreal, Canada; Burlington, Vermont; and Mount Washington, New Hampshire reached temperatures normally experienced in the Middle East or Africa. Even the Arctic didn’t escape the heat. These record temperatures bring deadly consequences, with at least 70 people dying in Canada and 90 in Japan this summer alone.

In the last few years, economists have uncovered an interesting phenomenon: In hotter years, the economic output of countries goes down. Developing countries located in tropical regions get hit the hardest, but everyone suffers. Climate change will exacerbate this effect. Scientists estimate that if nothing is done to reduce greenhouse gas emissions, hotter temperatures could reduce global incomes by an average of 23% by 2100.

Why is there such a strong correlation between heat and economic loss? There are several possibilities. Crop yields fall when it gets very warm. Heat also increases mortality and illness. Some evidence even suggests that the likelihood of conflict increases in hot years. While all of these factors likely play some role, the root cause may be more fundamental and more problematic: When exposed to uncomfortably high temperatures, human physiology makes us less productive.

My colleagues and I decided to investigate how important this fact might be in the big picture. We started by looking at the productivity of workers in India, the world’s third largest economy and a normally hot climate. We discovered that the productivity of workers engaged in activities such as cloth weaving or garment manufacturing dropped by as much as 4% for every degree that temperatures rose above 27° Celsius (80.6° Fahrenheit). But when we studied workers in the steel industry, who were operating machinery in plants with highly automated production, we found productivity did not fall…