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Particulate matter and labor supply: the role of caregiving and non-linearities

Author

Listed:
  • Fernando M. Aragón

    (Simon Fraser University)

  • Juan Jose Miranda

    (World Bank)

  • Paulina Oliva

    (University of California, Santa Barbara and NBER)

Abstract

This paper examines the effect of air pollution on labor supply in Lima, Peru. We focus on fine particulate matter (PM2.5), an important pollutant for health according to the medical literature, and show that moderate levels of pollution reduce hours worked for working adults. Our research design takes advantage of rich household panel data in labor outcomes to address omitted variables. This research design allows us to investigate whether the response to air pollution is non-linear. We find that the effect of moderate pollution levels on hours worked is concentrated among households with susceptible dependents, i.e., small children and elderly adults; while the highest concentrations affect all households. This suggests that caregiving is likely a mechanism linking air pollution to labor supply at moderate levels. We provide further evidence of this mechanism using DHS data on children morbidity for the same time period. Finally, we find no evidence of intra-household attenuation behavior. For instance, there is no re-allocation of labor across household members, and earnings decrease with air pollution.

Suggested Citation

  • Fernando M. Aragón & Juan Jose Miranda & Paulina Oliva, 2016. "Particulate matter and labor supply: the role of caregiving and non-linearities," Working Papers 2016-68, Peruvian Economic Association.
  • Handle: RePEc:apc:wpaper:2016-068
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Melvin Stephens, Jr. & Desmond J. Toohey, 2018. "The Impact of Health on Labor Market Outcomes: Experimental Evidence from MRFIT," NBER Working Papers 24231, National Bureau of Economic Research, Inc.
    2. Weibing Li & Kaixia Zhang, 2019. "Does Air Pollution Crowd Out Foreign Direct Investment Inflows? Evidence from a Quasi-natural Experiment in China," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(4), pages 1387-1414, August.
    3. Klingen, Joris & van Ommeren, Jos, 2020. "Urban air pollution and time losses: Evidence from cyclists in London," Regional Science and Urban Economics, Elsevier, vol. 81(C).
    4. Künn, Steffen & Palacios, Juan & Pestel, Nico, 2019. "Indoor Air Quality and Cognitive Performance," IZA Discussion Papers 12632, Institute of Labor Economics (IZA).
    5. Ordoñez, Pablo J., 2020. "Power Plants, Air Pollution, and Health in Colombia," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304284, Agricultural and Applied Economics Association.
    6. Guillermo Montt, 2018. "Too polluted to work? The gendered correlates of air pollution on hours worked," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-18, December.
    7. Fu, Shihe & Viard, Brian & Zhang, Peng, 2019. "Trans-Boundary Air Pollution Spillovers: Physical Transport and Economic Costs by Distance," MPRA Paper 102438, University Library of Munich, Germany, revised 14 Aug 2020.
    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. Jack, B. Kelsey, 2017. "Environmental economics in developing countries: An introduction to the special issue," Journal of Environmental Economics and Management, Elsevier, vol. 86(C), pages 1-7.

    More about this item

    JEL classification:

    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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