IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2023i17p13082-d1229101.html
   My bibliography  Save this article

The Impact of Air Pollution on Labor Supply in China

Author

Listed:
  • Mingxuan Fan

    (Department of Real Estate, NUS Business School, National University of Singapore, Singapore 119245, Singapore)

  • Corbett Grainger

    (Department of Agriculture and Applied Economics, University of Wisconsin-Madison, Madison, WI 53706, USA
    Centre for Climate and Energy Transition, Universitetet i Bergen, 5007 Bergen, Norway
    CESifo, 81679 München, Germany)

Abstract

A growing body of literature demonstrates that air pollution has negative impacts on human health, cognitive ability, and labor productivity, but little is known about the effect of chronic air pollution on labor supply decisions. We use restricted-access individual-level panel data from the China Family Panel Survey (CFPS), paired with sub-district level remote-sensing estimates of air pollution, to evaluate the impact of chronic exposure to fine particulate matter (PM 2.5 ) on an individual’s hours worked. We exploit within-individual changes in air pollution, and fixed effects estimates indicate that an increase of 1 μ g/m 3 in PM 2.5 reduces an individual’s average hours worked by about 14 min per week. We then leverage the city-level roll-out of air pollution monitoring and information provision to test hypotheses about the underlying mechanisms. We show that individuals with poor health respond to changes in PM 2.5 the most. For individuals who are environmentally unaware, this effect is mostly through an impact of pollution on health, while individuals who are environmentally aware engage in avoidance behavior. Finally, the roll-out of monitoring and information provision at the city level plays an important role in raising awareness and individuals’ responsiveness to pollution.

Suggested Citation

  • Mingxuan Fan & Corbett Grainger, 2023. "The Impact of Air Pollution on Labor Supply in China," Sustainability, MDPI, vol. 15(17), pages 1-19, August.
  • Handle: RePEc:gam:jsusta:v:15:y:2023:i:17:p:13082-:d:1229101
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/17/13082/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/2071-1050/15/17/13082/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hanna, Rema & Oliva, Paulina, 2015. "The effect of pollution on labor supply: Evidence from a natural experiment in Mexico City," Journal of Public Economics, Elsevier, vol. 122(C), pages 68-79.
    2. Koichiro Ito & Shuang Zhang, 2020. "Willingness to Pay for Clean Air: Evidence from Air Purifier Markets in China," Journal of Political Economy, University of Chicago Press, vol. 128(5), pages 1627-1672.
    3. Lichter, Andreas & Pestel, Nico & Sommer, Eric, 2017. "Productivity effects of air pollution: Evidence from professional soccer," Labour Economics, Elsevier, vol. 48(C), pages 54-66.
    4. Zhang, Junjie & Mu, Quan, 2018. "Air pollution and defensive expenditures: Evidence from particulate-filtering facemasks," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 517-536.
    5. Tom Chang & Joshua Graff Zivin & Tal Gross & Matthew Neidell, 2016. "Particulate Pollution and the Productivity of Pear Packers," American Economic Journal: Economic Policy, American Economic Association, vol. 8(3), pages 141-169, August.
    6. Tu, Meng & Zhang, Bing & Xu, Jianhua & Lu, Fangwen, 2020. "Mass media, information and demand for environmental quality: Evidence from the “Under the Dome”," Journal of Development Economics, Elsevier, vol. 143(C).
    7. Janke, Katharina, 2014. "Air pollution, avoidance behaviour and children's respiratory health: Evidence from England," Journal of Health Economics, Elsevier, vol. 38(C), pages 23-42.
    8. Sun, Cong & Kahn, Matthew E. & Zheng, Siqi, 2017. "Self-protection investment exacerbates air pollution exposure inequality in urban China," Ecological Economics, Elsevier, vol. 131(C), pages 468-474.
    9. Enrico Moretti & Matthew Neidell, 2011. "Pollution, Health, and Avoidance Behavior: Evidence from the Ports of Los Angeles," Journal of Human Resources, University of Wisconsin Press, vol. 46(1), pages 154-175.
    10. Olivier Deschênes & Michael Greenstone & Joseph S. Shapiro, 2017. "Defensive Investments and the Demand for Air Quality: Evidence from the NOx Budget Program," American Economic Review, American Economic Association, vol. 107(10), pages 2958-2989, October.
    11. Deschenes, Olivier & Wang, Huixia & Wang, Si & Zhang, Peng, 2020. "The effect of air pollution on body weight and obesity: Evidence from China," Journal of Development Economics, Elsevier, vol. 145(C).
    12. Janet Currie & Eric A. Hanushek & E. Megan Kahn & Matthew Neidell & Steven G. Rivkin, 2009. "Does Pollution Increase School Absences?," The Review of Economics and Statistics, MIT Press, vol. 91(4), pages 682-694, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yao, Yao & Li, Xue & Smyth, Russell & Zhang, Lin, 2022. "Air pollution and political trust in local government: Evidence from China," Journal of Environmental Economics and Management, Elsevier, vol. 115(C).
    2. Moritz A. Drupp & Ulrike Kornek & Jasper N. Meya & Lutz Sager, 2021. "Inequality and the Environment: The Economics of a Two-Headed Hydra," CESifo Working Paper Series 9447, CESifo.
    3. He, Xiaobo & Luo, Zijun & Zhang, Junjie, 2022. "The impact of air pollution on movie theater admissions," Journal of Environmental Economics and Management, Elsevier, vol. 112(C).
    4. Shihe Fu & V. Brian Viard, 2022. "A mayors perspective on tackling air pollution," Chapters, in: Charles K.Y. Leung (ed.), Handbook of Real Estate and Macroeconomics, chapter 16, pages 413-437, Edward Elgar Publishing.
    5. Panle Jia Barwick & Shanjun Li & Liguo Lin & Eric Zou, 2019. "From Fog to Smog: the Value of Pollution Information," NBER Working Papers 26541, National Bureau of Economic Research, Inc.
    6. Qi He & Xinde (James) Ji, 2021. "The Labor Productivity Consequences of Exposure to Particulate Matters: Evidence from a Chinese National Panel Survey," IJERPH, MDPI, vol. 18(23), pages 1-22, December.
    7. Edoardo Porto & Joanna Kopinska & Alessandro Palma, 2021. "Labor market effects of dirty air. Evidence from administrative data," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 38(3), pages 887-921, October.
    8. Liu, Haoming & Salvo, Alberto, 2017. "Severe Air Pollution and School Absences: Longitudinal Data on Expatriates in North China," IZA Discussion Papers 11134, Institute of Labor Economics (IZA).
    9. Liao, Liping & Du, Minzhe & Chen, Zhongfei, 2021. "Air pollution, health care use and medical costs: Evidence from China," Energy Economics, Elsevier, vol. 95(C).
    10. Giaccherini, Matilde & Kopinska, Joanna & Palma, Alessandro, 2021. "When particulate matter strikes cities: Social disparities and health costs of air pollution," Journal of Health Economics, Elsevier, vol. 78(C).
    11. Laure de Preux & Dheeya Rizmie & Daniela Fecht & John Gulliver & Weiyi Wang, 2023. "Does It Measure Up? A Comparison of Pollution Exposure Assessment Techniques Applied across Hospitals in England," IJERPH, MDPI, vol. 20(5), pages 1-26, February.
    12. Xin Zhang & Xun Zhang & Yuehua Liu & Xintong Zhao & Xi Chen, 2023. "The morbidity costs of air pollution through the Lens of Health Spending in China," Journal of Population Economics, Springer;European Society for Population Economics, vol. 36(3), pages 1269-1292, July.
    13. Borgschulte, Mark & Molitor, David & Zou, Eric Yongchen, 2022. "Air Pollution and the Labor Market: Evidence from Wildfire Smoke," IZA Discussion Papers 15373, Institute of Labor Economics (IZA).
    14. Feiwei Shen & Qiang Wang & Jing Zou & Huili Yan & Baitao Wang, 2023. "Air Pollution and Migration Decision of Migrants in Low-Carbon Society," IJERPH, MDPI, vol. 20(1), pages 1-18, January.
    15. Xie, Tingting & Yuan, Ye & Zhang, Hui, 2023. "Information, awareness, and mental health: Evidence from air pollution disclosure in China," Journal of Environmental Economics and Management, Elsevier, vol. 120(C).
    16. Liu, Haoming & Salvo, Alberto, 2018. "Severe air pollution and child absences when schools and parents respond," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 300-330.
    17. Magambo, Isaiah & Dikgang, Johane & Gelo, Dambala & Tregenna, Fiona, 2021. "Gold-Mining Pollution Exposure, Health Effects and Private Healthcare Expenditure in Tanzania," MPRA Paper 108800, University Library of Munich, Germany.
    18. Wang, Qian & Wang, Jun & Gao, Feng, 2021. "Who is more important, parents or children? Economic and environmental factors and health insurance purchase," The North American Journal of Economics and Finance, Elsevier, vol. 58(C).
    19. Li, Jennifer (Jie) & Massa, Massimo & Zhang, Hong & Zhang, Jian, 2021. "Air pollution, behavioral bias, and the disposition effect in China," Journal of Financial Economics, Elsevier, vol. 142(2), pages 641-673.
    20. Guo, Liwen & Cheng, Zhiming & Tani, Massimiliano & Cook, Sarah & Zhao, Jiaqi & Chen, Xi, 2022. "Air Pollution and Entrepreneurship," GLO Discussion Paper Series 1196, Global Labor Organization (GLO).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:15:y:2023:i:17:p:13082-:d:1229101. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.