Quantify the economic impact of water scarcity on agricultural productivity, manufacturing output, and urban labor participation across 40 water-stressed countries (2010-2025)

Panel regression analysis controlling for rainfall variation, temperature anomalies, and infrastructure investment. Three-year rolling averages to smooth seasonal variation. Fixed effects model with country and sector-level clustered standard errors.

Water scarcity reduces agricultural output by 8-12% per 10% reduction in water availability; manufacturing productivity loss averages 5-7%; urban unemployment increases 0.3-0.5 percentage points per 20% water deficit. Combined annual economic loss in water-stressed regions: $280B globally. Poorest quintile households experience 2.5x larger income loss than richest quintile, indicating severe regressive impact.