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The Impact of Pollution on Worker Productivity

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  • Joshua S. Graff Zivin
  • Matthew J. Neidell

Abstract

Environmental protection is typically cast as a tax on the labor market and the economy in general. Since a large body of evidence links pollution with poor health, and health is an important part of human capital, efforts to reduce pollution could plausibly be viewed as an investment in human capital and thus a tool for promoting economic growth. While a handful of studies have documented the impacts of pollution on labor supply, this paper is the first to rigorously assess the less visible but likely more pervasive impacts on worker productivity. In particular, we exploit a novel panel dataset of daily farm worker output as recorded under piece rate contracts merged with data on environmental conditions to relate the plausibly exogenous daily variations in ozone with worker productivity. We find robust evidence that ozone levels well below federal air quality standards have a significant impact on productivity: a 10 ppb decrease in ozone concentrations increases worker productivity by 4.2 percent.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17004.

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Date of creation: Apr 2011
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Handle: RePEc:nbr:nberwo:17004

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References

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  1. Richard T. Carson & Phoebe Koundouri & Céline Nauges, 2010. "Arsenic Mitigation in Bangladesh: A Household Labor Market Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(2), pages 407-414.
  2. Rema Hanna & Paulina Oliva, 2011. "The Effect of Pollution on Labor Supply: Evidence from a Natural Experiment in Mexico City," NBER Working Papers 17302, National Bureau of Economic Research, Inc.
  3. Ostro, Bart D., 1983. "The effects of air pollution on work loss and morbidity," Journal of Environmental Economics and Management, Elsevier, vol. 10(4), pages 371-382, December.
  4. Oriana Bandiera & Iwan Barankay & Imran Rasul, 2005. "Social Preferences and the Response to Incentives: Evidence from Personnel Data," The Quarterly Journal of Economics, MIT Press, vol. 120(3), pages 917-962, August.
  5. Harry J. Paarsch & Bruce S. Shearer, 1999. "The Response of Worker Effort to Piece Rates: Evidence from the British Columbia Tree-Planting Industry," Journal of Human Resources, University of Wisconsin Press, vol. 34(4), pages 643-667.
  6. Kenneth Y. Chay & Michael Greenstone, 1999. "The Impact of Air Pollution on Infant Mortality: Evidence from Geographic Variation in Pollution Shocks Induced by a Recession," NBER Working Papers 7442, National Bureau of Economic Research, Inc.
  7. Paarsch, Harry J. & Shearer, Bruce, 1996. "Piece Rates, Fixed Wages, and Incentive Effects: Statistical Evidence from Payroll Records," Cahiers de recherche 9623, Université Laval - Département d'économique.
  8. Oriana Bandiera & Iwan Barankay & Imran Rasul, 2010. "Social Incentives in the Workplace," Review of Economic Studies, Oxford University Press, vol. 77(2), pages 417-458.
  9. Maximilian Auffhammer & Ryan Kellogg, 2011. "Clearing the Air? The Effects of Gasoline Content Regulation on Air Quality," American Economic Review, American Economic Association, vol. 101(6), pages 2687-2722, October.
  10. Kenneth Y. Chay & Michael Greenstone, 2005. "Does Air Quality Matter? Evidence from the Housing Market," Journal of Political Economy, University of Chicago Press, vol. 113(2), pages 376-424, April.
  11. Hong H. & Chernozhukov V., 2002. "Three-Step Censored Quantile Regression and Extramarital Affairs," Journal of the American Statistical Association, American Statistical Association, vol. 97, pages 872-882, September.
  12. Joshua Graff Zivin & Matthew J. Neidell, 2010. "Temperature and the Allocation of Time: Implications for Climate Change," NBER Working Papers 15717, National Bureau of Economic Research, Inc.
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Citations

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As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Pollution has an impact on worker productivity
    by Economic Logician in Economic Logic on 2011-06-08 14:58:00
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Cited by:
  1. Hallegatte, Stephane & Heal, Geoffrey & Fay, Marianne & Treguer, David, 2011. "From growth to green growth -- a framework," Policy Research Working Paper Series 5872, The World Bank.
  2. Joshua Graff Zivin & Matthew Neidell, 2013. "Environment, Health, and Human Capital," Journal of Economic Literature, American Economic Association, vol. 51(3), pages 689-730, September.
  3. Fernando Aragon & Juan Pablo Rud, 2012. "Mining, Pollution and Agricultural Productivity: Evidence from Ghana," Discussion Papers dp12-08, Department of Economics, Simon Fraser University.
  4. Nathalie Mathieu-Bolh & Xavier Pautrel, 2014. "Environmental taxation, health and the life-cycle," Working Papers hal-00930936, HAL.
  5. Michael Jacobs, 2012. "Green Growth: Economic Theory and Political Discourse," Grantham Research Institute on Climate Change and the Environment Working Papers 92, Grantham Research Institute on Climate Change and the Environment.
  6. Stefano Bosi & David Desmarchelier & Lionel Ragot, 2013. "Pollution effects on labor supply and growth," CEEES Paper Series CE3S-05/13, European University at St. Petersburg, Department of Economics.
  7. David Desmarchelier, 2013. "Effect of pollution on the total factor productivity and the Hopf bifurcation," Economics Bulletin, AccessEcon, vol. 33(3), pages 2328-2339.
  8. Jans, Jenny & Johansson, Per & Nilsson, Peter, 2014. "Economic Status, Air Quality, and Child Health: Evidence from Inversion Episodes," IZA Discussion Papers 7929, Institute for the Study of Labor (IZA).
  9. Tom Chang & Joshua Graff Zivin & Tal Gross & Matthew Neidell, 2014. "Particulate Pollution and the Productivity of Pear Packers," NBER Working Papers 19944, National Bureau of Economic Research, Inc.

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