Pollution and Entrepreneurship: Evidence from Cicada Emergence
38 Pages Posted: 18 Mar 2023
Date Written: March 13, 2023
Abstract
This paper examines the impact of pollution on entrepreneurial activity. I use the recurring cicada emergence cycles in the U.S. as exogenous shocks to show that pollution caused by pesticide use decreases entrepreneurial activity and quality by 3%. I find that pesticide use is linked to the households' decision to start a business through the impact of pollutants on health. Households exposed to an exogenous increase in pesticides experience an increase in health problems, medical expenses, and a decrease in health status. I also find evidence for the "job-lock" effect of employer-based insurance coverage on entrepreneurial activity.
Keywords: entrepreneurship, household finance, pesticides, pollution
JEL Classification: I10, L26, Q10, Q53
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