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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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Publication status: published as Graff Zivin, Joshua and Matthew Neidell. “The impact of pollution on worker productivity,” American Economic Review, 102(7): 2012.
Handle: RePEc:nbr:nberwo:17004

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  1. Joshua Graff Zivin & Matthew J. Neidell, 2010. "Temperature and the Allocation of Time: Implications for Climate Change," NBER Working Papers, National Bureau of Economic Research, Inc 15717, National Bureau of Economic Research, Inc.
  2. Kenneth Y. Chay & Michael Greenstone, 1998. "Does Air Quality Matter? Evidence from the Housing Market," NBER Working Papers, National Bureau of Economic Research, Inc 6826, National Bureau of Economic Research, Inc.
  3. Richard T. Carson & Phoebe Koundouri & NAUGES Céline, 2009. "Arsenic Mitigation in Bangladesh A Household Labor Market Approach," LERNA Working Papers, LERNA, University of Toulouse 09.25.301, LERNA, University of Toulouse.
  4. A. Colin Cameron & Jonah B. Gelbach & Douglas L. Miller, 2006. "Robust Inference with Multi-way Clustering," NBER Technical Working Papers, National Bureau of Economic Research, Inc 0327, National Bureau of Economic Research, Inc.
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  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, National Bureau of Economic Research, Inc 7442, National Bureau of Economic Research, Inc.
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  8. Janet Currie & Matthew Neidell, 2004. "Air Pollution and Infant Health: What Can We Learn From California's Recent Experience," NBER Working Papers, National Bureau of Economic Research, Inc 10251, National Bureau of Economic Research, Inc.
  9. Shi Lan, 2010. "Incentive Effect of Piece-Rate Contracts: Evidence from Two Small Field Experiments," The B.E. Journal of Economic Analysis & Policy, De Gruyter, De Gruyter, vol. 10(1), pages 1-34, July.
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  13. Maximilian Auffhammer & Ryan Kellogg, 2011. "Clearing the Air? The Effects of Gasoline Content Regulation on Air Quality," American Economic Review, American Economic Association, American Economic Association, vol. 101(6), pages 2687-2722, October.
  14. 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, University of Wisconsin Press, vol. 34(4), pages 643-667.
  15. Rema Hanna & Paulina Oliva, 2011. "The Effect of Pollution on Labor Supply: Evidence from a Natural Experiment in Mexico City," NBER Working Papers, National Bureau of Economic Research, Inc 17302, National Bureau of Economic Research, Inc.
  16. Matthew Neidell, 2009. "Information, Avoidance Behavior, and Health: The Effect of Ozone on Asthma Hospitalizations," Journal of Human Resources, University of Wisconsin Press, University of Wisconsin Press, vol. 44(2).
  17. Jerry A. Hausman & Bart D. Ostro & David A. Wise, 1984. "Air Pollution and Lost Work," NBER Working Papers, National Bureau of Economic Research, Inc 1263, National Bureau of Economic Research, Inc.
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  19. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, American Economic Association, vol. 74(3), pages 433-44, June.
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Blog mentions

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. Jans, Jenny & Johansson, Per & Nilsson, Peter, 2014. "Economic Status, Air Quality, and Child Health: Evidence from Inversion Episodes," IZA Discussion Papers, Institute for the Study of Labor (IZA) 7929, Institute for the Study of Labor (IZA).
  2. Nicolas R. Ziebarth & Maike Schmitt & Martin Karlsson, 2014. "The Short-Term Population Health Effects of Weather and Pollution: Implications of Climate Change," SOEPpapers on Multidisciplinary Panel Data Research, DIW Berlin, The German Socio-Economic Panel (SOEP) 646, DIW Berlin, The German Socio-Economic Panel (SOEP).
  3. Joshua Graff Zivin & Matthew Neidell, 2013. "Environment, Health, and Human Capital," NBER Working Papers, National Bureau of Economic Research, Inc 18935, National Bureau of Economic Research, Inc.
  4. Gibson, Matthew, 2014. "Dirty and perverse: regulation-induced pollution substitution," University of California at San Diego, Economics Working Paper Series, Department of Economics, UC San Diego qt6tn7t0wv, Department of Economics, UC San Diego.
  5. Stefano Bosi & David Desmarchelier & Lionel Ragot, 2013. "Pollution effects on labor supply and growth," CEEES Paper Series, European University at St. Petersburg, Department of Economics CE3S-05/13, European University at St. Petersburg, Department of Economics.
  6. Marion Drut & Aurélie MAHIEUX, 2014. "Correcting agglomeration economies: How air pollution matters," Working Papers, HAL hal-01007019, HAL.
  7. Esther Duflo & Michael Greenstone & Nicholas Ryan, 2013. "Truth-telling by Third-party Auditors and the Response of Polluting Firms: Experimental Evidence from India," The Quarterly Journal of Economics, Oxford University Press, Oxford University Press, vol. 128(4), pages 1499-1545.
  8. David Desmarchelier, 2013. "Effect of pollution on the total factor productivity and the Hopf bifurcation," Economics Bulletin, AccessEcon, AccessEcon, vol. 33(3), pages 2328-2339.
  9. Nathalie Mathieu-Bolh & Xavier Pautrel, 2014. "Environmental taxation, health and the life-cycle," Working Papers, HAL hal-00990256, HAL.
  10. Fernando Aragon & Juan Pablo Rud, 2012. "Mining, Pollution and Agricultural Productivity: Evidence from Ghana," Discussion Papers, Department of Economics, Simon Fraser University dp12-08, Department of Economics, Simon Fraser University.
  11. Stéphane Hallegatte & Geoffrey Heal & Marianne Fay & David Treguer, 2012. "From Growth to Green Growth - a Framework," NBER Working Papers, National Bureau of Economic Research, Inc 17841, National Bureau of Economic Research, Inc.
  12. Tom Chang & Joshua S. Graff Zivin & Tal Gross & Matthew J. Neidell, 2014. "Particulate Pollution and the Productivity of Pear Packers," NBER Working Papers, National Bureau of Economic Research, Inc 19944, National Bureau of Economic Research, Inc.
  13. Michael Jacobs, 2012. "Green Growth: Economic Theory and Political Discourse," Grantham Research Institute on Climate Change and the Environment Working Papers, Grantham Research Institute on Climate Change and the Environment 92, Grantham Research Institute on Climate Change and the Environment.

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  1. The Impact of Pollution on Worker Productivity (AER 2012) in ReplicationWiki
  2. Economic Logic blog

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