The Effect of Pollution on Labor Supply: Evidence from a Natural Experiment in Mexico City
AbstractModerate effects of pollution on health may exert an important influence on labor market decisions. We exploit exogenous variation in pollution due to the closure of a large refinery in Mexico City to understand how pollution impacts labor supply. The closure led to an 8 percent decline in pollution in the surrounding neighborhoods. We find that a one percent increase in sulfur dioxide results in a 0.61 percent decrease in the hours worked. The effects do not appear to be driven by labor demand shocks nor differential migration as a result of the closure in the areas located near the refinery.
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Date of creation: Aug 2011
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Find related papers by JEL classification:
- O0 - Economic Development, Technological Change, and Growth - - General
- Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
- Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
- Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-08-29 (All new papers)
- NEP-ENV-2011-08-29 (Environmental Economics)
- NEP-LAB-2011-08-29 (Labour Economics)
- NEP-LMA-2011-08-29 (Labor Markets - Supply, Demand, & Wages)
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