Severe Air Pollution and Labor Productivity: Evidence from Industrial Towns in China

He, J., H. Liu and A. Salvo (2018). “Severe Air Pollution and Labor Productivity: Evidence from Industrial Towns in China,” American Economic Journal: Applied Economics

65 Pages Posted: 21 Mar 2015 Last revised: 14 Jun 2018

Jiaxiu He

National University of Singapore (NUS) - Department of Economics

Haoming Liu

National University of Singapore (NUS) - Department of Economics

Alberto Salvo

National University of Singapore (NUS) - Department of Economics

Date Written: March 3, 2018

Abstract

We examine day-to-day fluctuations in worker-level output at two manufacturing sites in China. Ambient fine-particle (PM2.5) pollution is severe but significantly variable, largely due to exogenous atmospheric ventilation. We obtain an insignificant immediate output response from concurrent (same-shift) variation in particle pollution. We then allow worker outcomes to respond to day-to-day variation in pollution with up to 30 days of delay. We uncover statistically significant adverse output effects from more prolonged exposure, but effects are not large. A substantial 10 ug/m3 PM2.5 variation sustained over 25 days reduces daily output by 1%.

Keywords: Air pollution, acute exposure, labor productivity, labor supply, heterogeneous effects, thermal inversions, wind, PM2.5, SO$_{2}$, environmental damage, environmental valuation, air pollutants/adverse effects, distributed lags, instrumental variables

JEL Classification: I18, J24, Q51, Q53, O44

Suggested Citation

He, Jiaxiu and Liu, Haoming and Salvo, Alberto, Severe Air Pollution and Labor Productivity: Evidence from Industrial Towns in China (March 3, 2018). He, J., H. Liu and A. Salvo (2018). “Severe Air Pollution and Labor Productivity: Evidence from Industrial Towns in China,” American Economic Journal: Applied Economics. Available at SSRN: https://ssrn.com/abstract=2581311 or http://dx.doi.org/10.2139/ssrn.2581311

Jiaxiu He

National University of Singapore (NUS) - Department of Economics ( email )

1 Arts Link, AS2 #06-02
Singapore 117570, Singapore 119077
Singapore

Haoming Liu

National University of Singapore (NUS) - Department of Economics ( email )

10 Kent Ridge Crest
Singapore 119260
Singapore

Alberto Salvo (Contact Author)

National University of Singapore (NUS) - Department of Economics ( email )

1 Arts Link, AS2 #06-02
Singapore 117570, Singapore 119077
Singapore

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