IDEAS home Printed from https://ideas.repec.org/p/bir/birmec/09-13.html
   My bibliography  Save this paper

Dirty Money: Is there a Wage Premium for Working in a Pollution Intensive Industry

Author

Listed:
  • Matthew A Cole
  • Robert J R Elliott
  • Joanne K Lindley

Abstract

Within a compensating wage differential framework we investigate whether there is a wage premium for working in a pollution intensive industry. Our results for the economy as a whole suggest a small wage premium of approximately one quarter of one percent associated with the risk of working in a dirty job. This premium rises to over fifteen percent for those individuals who work in one of the five dirtiest industries. We also find evidence of a fatal risk wage premium, providing estimates of the value of a statistical life of between £12 million and £19 million (2000 prices).

Suggested Citation

  • Matthew A Cole & Robert J R Elliott & Joanne K Lindley, 2009. "Dirty Money: Is there a Wage Premium for Working in a Pollution Intensive Industry," Discussion Papers 09-13, Department of Economics, University of Birmingham.
  • Handle: RePEc:bir:birmec:09-13
    as

    Download full text from publisher

    File URL: ftp://ftp.bham.ac.uk/pub/RePEc/pdf/09-13.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. G. Arabsheibani & A. Marin, 2000. "Stability of Estimates of the Compensation for Danger," Journal of Risk and Uncertainty, Springer, vol. 20(3), pages 247-269, May.
    2. Henderson, J Vernon, 1996. "Effects of Air Quality Regulation," American Economic Review, American Economic Association, vol. 86(4), pages 789-813, September.
    3. Dora L. Costa & Matthew E. Kahn, 2004. "Changes in the Value of Life, 1940--1980," Journal of Risk and Uncertainty, Springer, vol. 29(2), pages 159-180, September.
    4. Duncan, Greg J & Holmlund, Bertil, 1983. "Was Adam Smith Right after All? Another Test of the Theory of Compensating Wage Differentials," Journal of Labor Economics, University of Chicago Press, vol. 1(4), pages 366-379, October.
    5. Siebert, W Stanley & Wei, X, 1994. "Compensating Wage Differentials for Workplace Accidents: Evidence for Union and Nonunion Workers in the UK," Journal of Risk and Uncertainty, Springer, vol. 9(1), pages 61-76, July.
    6. Dorman,Peter, 2009. "Markets and Mortality," Cambridge Books, Cambridge University Press, number 9780521123044, October.
    7. David G. Blanchflower & Andrew J. Oswald, 1995. "The Wage Curve," MIT Press Books, The MIT Press, edition 1, volume 1, number 026202375x.
    8. Robert Gibbons & Lawrence Katz, 1992. "Does Unmeasured Ability Explain Inter-Industry Wage Differentials?," Review of Economic Studies, Oxford University Press, vol. 59(3), pages 515-535.
    9. Viscusi, W Kip & Aldy, Joseph E, 2003. "The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World," Journal of Risk and Uncertainty, Springer, vol. 27(1), pages 5-76, August.
    10. Duncan, Greg J & Stafford, Frank P, 1980. "Do Union Members Receive Compensating Wage Differentials?," American Economic Review, American Economic Association, vol. 70(3), pages 355-371, June.
    11. Berman, Eli & Bui, Linda T. M., 2001. "Environmental regulation and labor demand: evidence from the South Coast Air Basin," Journal of Public Economics, Elsevier, vol. 79(2), pages 265-295, February.
    12. Janusz R. Mrozek & Laura O. Taylor, 2002. "What determines the value of life? a meta-analysis," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 21(2), pages 253-270.
    13. Brooks, Nancy & Sethi, Rajiv, 1997. "The Distribution of Pollution: Community Characteristics and Exposure to Air Toxics," Journal of Environmental Economics and Management, Elsevier, vol. 32(2), pages 233-250, February.
    14. W. Kip Viscusi, 2004. "The Value of Life: Estimates with Risks by Occupation and Industry," Economic Inquiry, Western Economic Association International, vol. 42(1), pages 29-48, January.
    15. Viscusi, W Kip, 1993. "The Value of Risks to Life and Health," Journal of Economic Literature, American Economic Association, vol. 31(4), pages 1912-1946, December.
    16. Dallas Burtraw & Alan Krupnick & Erin Mansur & David Austin & Deirdre Farrell, 1998. "Costs And Benefits Of Reducing Air Pollutants Related To Acid Rain," Contemporary Economic Policy, Western Economic Association International, vol. 16(4), pages 379-400, October.
    17. Leigh J. Paul, 1995. "Compensating Wages, Value of a Statistical Life, and Inter-industry Differentials," Journal of Environmental Economics and Management, Elsevier, vol. 28(1), pages 83-97, January.
    18. Hwang, Hae-shin & Reed, W Robert & Hubbard, Carlton, 1992. "Compensating Wage Differentials and Unobserved Productivity," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 835-858, August.
    19. Viscusi, W. Kip, 2007. "Regulation of Health, Safety, and Environmental Risks," Handbook of Law and Economics, Elsevier.
    20. McKinley Blackburn & David Neumark, 1992. "Unobserved Ability, Efficiency Wages, and Interindustry Wage Differentials," The Quarterly Journal of Economics, Oxford University Press, vol. 107(4), pages 1421-1436.
    21. Morgenstern, Richard D. & Pizer, William A. & Shih, Jhih-Shyang, 2002. "Jobs Versus the Environment: An Industry-Level Perspective," Journal of Environmental Economics and Management, Elsevier, vol. 43(3), pages 412-436, May.
    22. Wiggins, Steven N & Ringleb, Al H, 1992. "Adverse Selection and Long-Term Hazards: The Choice between Contract and Mandatory Liability Rules," The Journal of Legal Studies, University of Chicago Press, vol. 21(1), pages 189-215, January.
    23. Leeth, John D & Ruser, John, 2003. "Compensating Wage Differentials for Fatal and Nonfatal Injury Risk by Gender and Race," Journal of Risk and Uncertainty, Springer, vol. 27(3), pages 257-277, December.
    24. Jason F. Shogren & Tommy Stamland, 2002. "Skill and the Value of Life," Journal of Political Economy, University of Chicago Press, vol. 110(5), pages 1168-1197, October.
    25. Viscusi, W Kip & O'Connor, Charles J, 1984. "Adaptive Responses to Chemical Labeling: Are Workers Bayesian Decision Makers?," American Economic Review, American Economic Association, vol. 74(5), pages 942-956, December.
    26. repec:reg:rpubli:282 is not listed on IDEAS
    27. Viscusi, W Kip, 2003. "Racial Differences in Labor Market Values of a Statistical Life," Journal of Risk and Uncertainty, Springer, vol. 27(3), pages 239-256, December.
    28. Kostiuk, Peter F, 1990. "Compensating Differentials for Shift Work," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 1054-1075, October.
    29. Michael Greenstone, 2001. "The Impacts of Environmental Regulations on Industrial Activity: Evidence from the 1970 & 1977 Clean Air Act Amendments and the Census of Manufactures," NBER Working Papers 8484, National Bureau of Economic Research, Inc.
    30. Grund, Christian, 2000. "Wages as Risk Compensation in Germany," IZA Discussion Papers 221, Institute for the Study of Labor (IZA).
    31. Sandy, Robert & R. F. Elliot & W. S. Siebert & X. D. Wei, 2001. "Measurement Error and the Effects of Unions on the Compensating Differentials for Fatal Workplace Risks," Journal of Risk and Uncertainty, Springer, vol. 23(1), pages 33-56, July.
    32. Lott, John R, Jr & Manning, Richard L, 2000. "Have Changing Liability Rules Compensated Workers Twice for Occupational Hazards? Earnings Premiums and Cancer Risks," The Journal of Legal Studies, University of Chicago Press, vol. 29(1), pages 99-130, January.
    33. Kahn, Matthew E., 1997. "Particulate pollution trends in the United States," Regional Science and Urban Economics, Elsevier, vol. 27(1), pages 87-107, February.
    34. Peter Dorman & Paul Hagstrom, 1998. "Wage Compensation for Dangerous Work Revisited," ILR Review, Cornell University, ILR School, vol. 52(1), pages 116-135, October.
    35. Brown, Charles & Medoff, James, 1989. "The Employer Size-Wage Effect," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1027-1059, October.
    36. Garen, John, 1988. "Compensating Wage Differentials and the Endogeneity of Job Riskiness," The Review of Economics and Statistics, MIT Press, vol. 70(1), pages 9-16, February.
    37. Nestor E. Terleckyj, 1976. "Household Production and Consumption," NBER Books, National Bureau of Economic Research, Inc, number terl76-1.
    38. Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-338, May.
    39. repec:aph:ajpbhl:1992:82:7:941-943_7 is not listed on IDEAS
    40. Cole Matthew A & Elliott Rob J, 2007. "Do Environmental Regulations Cost Jobs? An Industry-Level Analysis of the UK," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(1), pages 1-27, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Karine Nyborg & Tao Zhang, 2013. "Is Corporate Social Responsibility Associated with Lower Wages?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 55(1), pages 107-117, May.
    2. Giulio Cainelli & Massimiliano Mazzanti & Roberto Zoboli, 2013. "Environmental performance, manufacturing sectors and firm growth: structural factors and dynamic relationships," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 15(4), pages 367-387, October.
    3. Cainelli, Giulio & D’Amato, Alessio & Mazzanti, Massimiliano, 2015. "Adoption of waste-reducing technology in manufacturing: Regional factors and policy issues," Resource and Energy Economics, Elsevier, vol. 39(C), pages 53-67.
    4. Yanhong H. Jin & James W. Mjelde & Kerry K. Litzenberg, 2014. "Economic analysis of job-related attributes in undergraduate students' initial job selection," Education Economics, Taylor & Francis Journals, vol. 22(3), pages 305-327, June.
    5. Borghesi, Simone & Cainelli, Giulio & Mazzanti, Massimiliano, 2015. "Linking emission trading to environmental innovation: Evidence from the Italian manufacturing industry," Research Policy, Elsevier, vol. 44(3), pages 669-683.
    6. Bouvier, Rachel, 2014. "Distribution of income and toxic emissions in Maine, United States: Inequality in two dimensions," Ecological Economics, Elsevier, vol. 102(C), pages 39-47.
    7. Giulio Cainelli & Massimiliano Mazzanti & Simone Borghesi, 2012. "The European Emission Trading Scheme and environmental innovation diffusion: Empirical analyses using Italian CIS data," Working Papers 201201, University of Ferrara, Department of Economics.
    8. Simone Borghesi & Giulio Cainelli & Massimiliano Mazzanti, 2012. "Brown Sunsets and Green Dawns in the Industrial Sector: Environmental Innovations, Firm Behavior and the European Emission Trading," Working Papers 2012.03, Fondazione Eni Enrico Mattei.

    More about this item

    Keywords

    Compensating Wage Differentials; Pollution; Value of Statistical Life;

    JEL classification:

    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bir:birmec:09-13. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Colin Rowat). General contact details of provider: http://edirc.repec.org/data/debhauk.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.