Severe Air Pollution and Labor Productivity

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E S ABSTRACT Severe Air Pollution and Labor ProductivityWe examine day-to-day fluctuations in worker-level output over 15 months for a panel of 98 manufacturing workers at a plant located in an industrial city in Hebei province, north China. Long-term workers earn piece-rate wages, with no base pay or minimum pay, for homogeneous tasks performed over fixed 8-hour shifts. Over the sample period, ambient fine-particle (PM2.5) mass concentrations measured at an outdoor air monitor located 2 km from the plant ranged between 10 and 773 micrograms per cubic meter (µg/m 3 , 8-hour means), variation that is an order of magnitude larger than what is observed in the rich world today. We document large reductions in productivity, of the order of 15%, over the first 200 µg/m 3 rise in PM2.5 concentrations, with the drop leveling off for further increases in fineparticle pollution. A back-of-the-envelope calculation suggests that labor productivity across 190 Chinese cities could rise by on average 4% per year were the distributions of hourly PM2.5 truncated at 25 µg/m 3 . We also find reduced product quality as pollution rises. Our model allows for selection into work attendance, though we do not find particle pollution to be a meaningful determinant of non-attendance, which is very low in our labor setting. Subsequent research should verify the external validity of our findings. JEL Classification:J24, Q51, Q52, Q53, O44, R11

Productivity effects of air pollution: Evidence from professional soccer

“…Even moderate concentrations of particulate matter commonly experienced in developed countries negatively affect the productivity of a selective group of professional soccer players, young and male athletes, to a considerable extent. Our findings hence complement previous empirical evidence on air pollution's negative effects on the productivity of low-skilled agricultural and factory workers in countries with higher levels of pollution (Graff Zivin and Neidell, 2012;Chang et al, 2014;Li et al, 2015). While our data allows us to consistently measure individuals' productivity for an entire industry and over multiple years, it remains unclear to what extent our findings can be generalized to the wider labor force.…”

“…2 However, negative consequences of environmental damage are not limited to population health, with air pollution impacting the formation of human capital by affecting absenteeism, schooling outcomes or labor supply 3 , and hence triggering long-term consequences for individual earnings (Isen et al, 2014;Lavy et al, 2014a,b). Moreover, recent studies, provide evidence that pollution may also reduce workers' short-run productivity and thus hinder economic growth (Graff Zivin and Neidell, 2012;Chang et al, 2014;Li et al, 2015).…”

Particulate matter and labor supply: The role of caregiving and non-linearities

“…Existing evidence suggests that air pollution has negative effects on human health, especially for children and elderly adults. 1 A recent literature has also started to document negative effects among healthy adults in the form of reduction of labor productivity (Graff-Zivin and Neidell, 2012;Adhvaryu et al, 2014;Chang et al, 2014;Li et al, 2015) and hours worked (Hanna and Oliva, 2015). 2 These findings, from the U.S., India, and Mexico, point to changes in labor outcomes as relevant pollution externalities.…”

“…Other studies focus on NOx (Deschenes et al, 2012), SO2 (Hanna and Oliva, 2015) and aerosols (Jayachandran, 2009). Among the few studies focusing on PM2.5 are Zweig et al (2014), Chang et al (2014), Adhvaryu et al (2014), Lavy et al (forthcoming) and Li et al (2015).…”

Air pollution and worker productivity

“…PM 2.5 has been found to lower the output of manufacturing workers in the Hebei province of northern China [11]. The authors obtained detailed productivity data from two firms and performed a similar analysis to the previously mentioned studies, and found productivity effects from exposure over a 30-day period.…”