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Air Pollution, Smoky Days and Hours Worked

Author

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  • Ron Chan
  • Martino Pelli
  • Veronica Vienne

Abstract

The current literature on the economic cost of air pollution in the labor market primarily focuses on labor productivity, leaving the impact on working hours relatively unexplored. In this paper, we investigate the effects of air pollution on work hours using a nationally representative sample for Chile. To address the potential endogeneity of air pollution, we leverage the exogenous occurrence of wildfires between 2010 and 2018. We construct the smoke plumes originating from each wildfire to identify the causal impact of air pollution on hours worked. Our analysis reveals that an exogenous increase in fine particulate matter resulting from an extra smoky day leads to a 2% reduction in work hours for the average Chilean worker. The impact is more pronounced for male workers engaged in outdoor tasks, such as agriculture, and for economically disadvantaged households, where the negative effects of air pollution can be up to four times larger. Our findings imply that earlier studies focusing only on labor productivity may be underestimating the effect of air pollution on economic output by 11-13%. La littérature actuelle sur le coût économique de la pollution de l'air sur le marché du travail se concentre principalement sur la productivité du travail, laissant l'impact sur les heures de travail relativement inexploré. Dans cet article, nous étudions les effets de la pollution de l'air sur les heures de travail en utilisant un échantillon national représentatif du Chili. Pour traiter l'endogénéité potentielle de la pollution de l'air, nous tirons parti de l'occurrence exogène des incendies de forêt entre 2010 et 2018. Nous construisons les panaches de fumée provenant de chaque incendie afin d'identifier l'impact causal de la pollution de l'air sur les heures travaillées. Notre analyse révèle qu'une augmentation exogène des particules fines résultant d'une journée de fumée supplémentaire entraîne une réduction de 2 % des heures de travail pour le travailleur chilien moyen. L'impact est plus prononcé pour les hommes qui travaillent à l'extérieur, comme dans l'agriculture, et pour les ménages économiquement défavorisés, où les effets négatifs de la pollution de l'air peuvent être jusqu'à quatre fois plus importants. Nos résultats impliquent que les études antérieures axées uniquement sur la productivité du travail pourraient sous-estimer de 11 à 13 % l'effet de la pollution de l'air sur la production économique.

Suggested Citation

  • Ron Chan & Martino Pelli & Veronica Vienne, 2023. "Air Pollution, Smoky Days and Hours Worked," CIRANO Working Papers 2023s-15, CIRANO.
  • Handle: RePEc:cir:cirwor:2023s-15
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    File URL: https://cirano.qc.ca/files/publications/2023s-15.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    air pollution; hours worked; wildfires; Chile; pollution de l'air; heures travaillées; incendies de forêt; Chili;
    All these keywords.

    JEL classification:

    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development

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