Urban Air Pollution and Sick Leaves: Evidence from Social Security Data

64 Pages Posted: 29 Dec 2020

See all articles by Felix Holub

Felix Holub

University of Mannheim - Department of Economics

Laura Hospido

Banco de España - Research Department

Ulrich J. Wagner

University of Mannheim - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: December 29, 2020

Abstract

We estimate the causal impact of air pollution on the incidence of sick leaves in a representative panel of employees affiliated to the Spanish social security system. Using over 100 million worker-by-week observations from the period 2005-2014, we estimate the relationship between the share of days an individual is on sick leave in a given week and exposure to particulate matter (PM10) at the place of residence, controlling for weather, individual effects, and a wide range of time-by-location controls. We exploit quasi-experimental variation in PM10 that is due to Sahara dust advection in order to instrument for local PM10 concentrations. We estimate that the causal effect of PM10 on sick leaves is positive and varies with respect to worker and job characteristics. The effect is stronger for workers with pre-existing medical conditions, and weaker for workers with low job security. Our estimates are instrumental for quantifying air pollution damages due to changes in labor supply. We estimate that improved ambient air quality in urban Spain between 2005 and 2014 saved at least €503 million in foregone production by reducing worker absence by more than 5.55 million days.

Keywords: air pollution, health, sickness insurance, labor supply

JEL Classification: I12, I13, Q51, Q53

Suggested Citation

Holub, Felix and Hospido, Laura and Wagner, Ulrich J., Urban Air Pollution and Sick Leaves: Evidence from Social Security Data (December 29, 2020). Banco de Espana Working Paper No. 2041, Available at SSRN: https://ssrn.com/abstract=3756778 or http://dx.doi.org/10.2139/ssrn.3756778

Felix Holub (Contact Author)

University of Mannheim - Department of Economics ( email )

D-68131 Mannheim
Germany

Laura Hospido

Banco de España - Research Department ( email )

Alcala 48
Madrid, 28014
Spain
+34 913385625 (Phone)
+34 913385678 (Fax)

HOME PAGE: http://www.laurahospido.com/

Ulrich J. Wagner

University of Mannheim - Department of Economics ( email )

D-68131 Mannheim
Germany

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