IDEAS home Printed from https://ideas.repec.org/p/cid/wpfacu/225.html
   My bibliography  Save this paper

The Effect of Pollution on Labor Supply: Evidence from a Natural Experiment in Mexico City

Author

Listed:
  • Rema Hanna

    (Center for International Development at Harvard University)

  • Paulina Oliva

Abstract

Moderate 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.

Suggested Citation

  • Rema Hanna & Paulina Oliva, 2011. "The Effect of Pollution on Labor Supply: Evidence from a Natural Experiment in Mexico City," CID Working Papers 225, Center for International Development at Harvard University.
  • Handle: RePEc:cid:wpfacu:225
    as

    Download full text from publisher

    File URL: https://www.hks.harvard.edu/sites/default/files/centers/cid/files/publications/faculty-working-papers/225_HannaAug2011.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lucas W. Davis, 2008. "The Effect of Driving Restrictions on Air Quality in Mexico City," Journal of Political Economy, University of Chicago Press, vol. 116(1), pages 38-81, February.
    2. Fehr, Ernst & Goette, Lorenz, 2005. "Robustness and real consequences of nominal wage rigidity," Journal of Monetary Economics, Elsevier, vol. 52(4), pages 779-804, May.
    3. Richard T. Carson & Phoebe Koundouri & Céline Nauges, 2010. "Arsenic Mitigation in Bangladesh: A Household Labor Market Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(2), pages 407-414.
    4. Abhijit Banerjee & Esther Duflo, 2006. "Addressing Absence," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 117-132, Winter.
    5. Bovenberg, A. Lans & Goulder, Lawrence H., 1997. "Costs of Environmentally Motivated Taxes in the Presence of Other Taxes: General Equilibrium Analyses," National Tax Journal, National Tax Association, vol. 50(1), pages 59-88, March.
    6. W. Reed Walker, 2013. "The Transitional Costs of Sectoral Reallocation: Evidence From the Clean Air Act and the Workforce," The Quarterly Journal of Economics, Oxford University Press, vol. 128(4), pages 1787-1835.
    7. Ostro, Bart D., 1983. "The effects of air pollution on work loss and morbidity," Journal of Environmental Economics and Management, Elsevier, vol. 10(4), pages 371-382, December.
    8. Esther Duflo & Rema Hanna & Stephen P. Ryan, 2012. "Incentives Work: Getting Teachers to Come to School," American Economic Review, American Economic Association, vol. 102(4), pages 1241-1278, June.
    9. Crocker, Thomas D & Horst, Robert L, Jr, 1981. "Hours of Work, Labor Productivity, and Environmental Conditions: A Case Study," The Review of Economics and Statistics, MIT Press, vol. 63(3), pages 361-368, August.
    10. Eva O. Arceo Gómez & Raymundo M. Campos-Vázquez, 2010. "Labor supply of married women in Mexico: 1990-2000," Serie documentos de trabajo del Centro de Estudios Económicos 2010-16, El Colegio de México, Centro de Estudios Económicos.
    11. Jerry A. Hausman & Bart D. Ostro & David A. Wise, 1984. "Air Pollution and Lost Work," NBER Working Papers 1263, National Bureau of Economic Research, Inc.
    12. Kenneth Y. Chay & Michael Greenstone, 2003. "The Impact of Air Pollution on Infant Mortality: Evidence from Geographic Variation in Pollution Shocks Induced by a Recession," The Quarterly Journal of Economics, Oxford University Press, vol. 118(3), pages 1121-1167.
    13. Janet Currie & Matthew Neidell, 2005. "Air Pollution and Infant Health: What Can We Learn from California's Recent Experience?," The Quarterly Journal of Economics, Oxford University Press, vol. 120(3), pages 1003-1030.
    14. Janet Currie & Eric A. Hanushek & E. Megan Kahn & Matthew Neidell & Steven G. Rivkin, 2009. "Does Pollution Increase School Absences?," The Review of Economics and Statistics, MIT Press, vol. 91(4), pages 682-694, November.
    15. Seema Jayachandran, 2009. "Air Quality and Early-Life Mortality: Evidence from Indonesia’s Wildfires," Journal of Human Resources, University of Wisconsin Press, vol. 44(4).
    16. Matthew Neidell, 2009. "Information, Avoidance Behavior, and Health: The Effect of Ozone on Asthma Hospitalizations," Journal of Human Resources, University of Wisconsin Press, vol. 44(2).
    17. West, Sarah E. & Williams III, Roberton C., 2007. "Optimal taxation and cross-price effects on labor supply: Estimates of the optimal gas tax," Journal of Public Economics, Elsevier, vol. 91(3-4), pages 593-617, April.
    18. Ghanem, Dalia & Zhang, Junjie, 2014. "‘Effortless Perfection:’ Do Chinese cities manipulate air pollution data?," Journal of Environmental Economics and Management, Elsevier, vol. 68(2), pages 203-225.
    19. Joshua Graff Zivin & Matthew Neidell, 2012. "The Impact of Pollution on Worker Productivity," American Economic Review, American Economic Association, vol. 102(7), pages 3652-3673, December.
    20. Bovenberg, A. Lans & Goulder, Lawrence H., 1997. "Costs of Environmentally Motivated Taxes in the Presence of Other Taxes: General Equilibrium Analyses," National Tax Journal, National Tax Association;National Tax Journal, vol. 50(1), pages 59-88, March.
    21. Adriana Lleras-Muney, 2005. "The Relationship Between Education and Adult Mortality in the United States," Review of Economic Studies, Oxford University Press, vol. 72(1), pages 189-221.
    22. Elizabeth Frankenberg & Douglas McKee & Duncan Thomas, 2005. "Health consequences of forest fires in Indonesia," Demography, Springer;Population Association of America (PAA), vol. 42(1), pages 109-129, February.
    23. Jesse Schwartz & Robert Repetto, 2000. "Nonseparable Utility and the Double Dividend Debate: Reconsidering the Tax-Interaction Effect," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 15(2), pages 149-157, February.
    24. Williams III, Roberton C., 2003. "Health effects and optimal environmental taxes," Journal of Public Economics, Elsevier, vol. 87(2), pages 323-335, February.
    25. Parry Ian W. H., 1995. "Pollution Taxes and Revenue Recycling," Journal of Environmental Economics and Management, Elsevier, vol. 29(3), pages 64-77, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Aragón, Fernando M. & Miranda, Juan Jose & Oliva, Paulina, 2017. "Particulate matter and labor supply: The role of caregiving and non-linearities," Journal of Environmental Economics and Management, Elsevier, vol. 86(C), pages 295-309.
    2. Rivera, Nathaly M., 2021. "Air quality warnings and temporary driving bans: Evidence from air pollution, car trips, and mass-transit ridership in Santiago," Journal of Environmental Economics and Management, Elsevier, vol. 108(C).
    3. Younoh Kim & James Manley & Vlad Radoias, 2017. "Medium- and long-term consequences of pollution on labor supply: evidence from Indonesia," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 6(1), pages 1-15, December.
    4. Rivera, Nathaly M., 2017. "The Effectiveness of Temporary Driving Restrictions: Evidence from Air Pollution, Vehicle Flows, and Mass-Transit Users in Santiago," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 259182, Agricultural and Applied Economics Association.
    5. Ziebarth, N. R. & Schmitt, M. & Karlsson, M., 2013. "The short-term population health effects of weather and pollution: implications of climate change," Health, Econometrics and Data Group (HEDG) Working Papers 13/34, HEDG, c/o Department of Economics, University of York.
    6. Joshua Graff Zivin & Matthew Neidell, 2012. "The Impact of Pollution on Worker Productivity," American Economic Review, American Economic Association, vol. 102(7), pages 3652-3673, December.
    7. Joshua Graff Zivin & Matthew Neidell, 2013. "Environment, Health, and Human Capital," Journal of Economic Literature, American Economic Association, vol. 51(3), pages 689-730, September.
    8. Chen, Siyu & Guo, Chongshan & Huang, Xinfei, 2018. "Air Pollution, Student Health, and School Absences: Evidence from China," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 465-497.
    9. Felix Holub & Laura Hospido & Ulrich J. Wagner, 2020. "Urban air pollution and sick leaves: evidence from social security data," Working Papers 2041, Banco de España.
    10. Graff Zivin, Joshua & Liu, Tong & Song, Yingquan & Tang, Qu & Zhang, Peng, 2020. "The unintended impacts of agricultural fires: Human capital in China," Journal of Development Economics, Elsevier, vol. 147(C).
    11. Jans, Jenny & Johansson, Per & Nilsson, J. Peter, 2018. "Economic status, air quality, and child health: Evidence from inversion episodes," Journal of Health Economics, Elsevier, vol. 61(C), pages 220-232.
    12. Lichter, Andreas & Pestel, Nico & Sommer, Eric, 2017. "Productivity effects of air pollution: Evidence from professional soccer," Labour Economics, Elsevier, vol. 48(C), pages 54-66.
    13. Nicholas Rivers & Soodeh Saberian & Brandon Schaufele, 2020. "Public transit and air pollution: Evidence from Canadian transit strikes," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(2), pages 496-525, May.
    14. Tong Liu & Guojun He & Alexis Lau, 2018. "Avoidance behavior against air pollution: evidence from online search indices for anti-PM2.5 masks and air filters in Chinese cities," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 20(2), pages 325-363, April.
    15. Dolores de la Mata & Carlos Felipe Gaviria Garces, 2019. "Exposure to Pollution and Infant Health: Evidence from Colombia," CINCH Working Paper Series 1902, Universitaet Duisburg-Essen, Competent in Competition and Health.
    16. Fernando M. Aragon & Juan Jose Miranda & Paulina Oliva, 2016. "Particulate matter and labor supply: evidence from Peru," Discussion Papers dp16-01, Department of Economics, Simon Fraser University.
    17. Courtney J. Ward, 2015. "It's an ill wind: The effect of fine particulate air pollution on respiratory hospitalizations," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 48(5), pages 1694-1732, December.
    18. Štěpán Mikula & Mariola Pytliková, 2020. "Air Pollution & Migration: Exploiting a Natural Experiment from the Czech Republic," EconPol Working Paper 43, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    19. Margaryan, Shushanik, 2021. "Low emission zones and population health," Journal of Health Economics, Elsevier, vol. 76(C).
    20. Boyce, James K. & Zwickl, Klara & Ash, Michael, 2016. "Measuring environmental inequality," Ecological Economics, Elsevier, vol. 124(C), pages 114-123.

    More about this item

    Keywords

    Mexico City; Pollution; Labour Supply;
    All these keywords.

    JEL classification:

    • O0 - Economic Development, Innovation, 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

    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:cid:wpfacu:225. 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: . General contact details of provider: https://edirc.repec.org/data/ciharus.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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chuck McKenney (email available below). General contact details of provider: https://edirc.repec.org/data/ciharus.html .

    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.