Arsenic Mitigation in Bangladesh: A Household Labor Market Approach

A major environmental tragedy of modern times is the widespread arsenic contamination of shallow drinking water wells in rural Bangladesh which went unrecognized for years. Large numbers of people are now starting to show a range of symptoms long associated with chronic arsenic exposure. Rural families in Bangladesh, one of the poorest countries in the world, face financial risks from major illness both from the cost of medical care and from the loss of income associated with reduced labor supply and productivity. Because of the lack of comprehensive government assistance programs and formal insurance markets, most of these households have to rely on private, informal, insurance mechanisms. For the poor these typically take place at the household level. While arsenic-related health problems in Bangladesh have long received considerable attention (e.g., Smith, Lingas, and Rahman 2000), implications for the labor supply have not been examined. In this article, we look at the impacts of arsenic contamination on both the overall level of hours worked and the distribution of these hours within households. Using a large sample of rural households matched to arsenic exposure, we find (i) overall household labor supply is 8% smaller due to arsenic exposure and (ii) intra-household reallocation of work between males and females is used to self-insure against the risk induced by arsenic exposure.