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Particulate matter and labor supply: evidence from Peru

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Abstract

This paper examines the effect of air pollution on labor supply using the case of Lima, Peru. We focus on fine particulate matter (PM2.5), an important air pollutant, and show that moderate levels of pollution reduce hours worked for working adults. The effect is concentrated among households with susceptible dependents, i.e., small children and elderly adults. This indicates that caregiving is likely a mechanism linking air pollution to labor supply. We find no evidence of intra-household attenuation behavior. For instance, there is no re-allocation of labor across household members, and earnings decrease. Finally, we show evidence of non-linearities in the dose response function: at higher concentrations, households without susceptible dependents also start experiencing negative effects.

Suggested Citation

  • 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.
  • Handle: RePEc:sfu:sfudps:dp16-01
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    Cited by:

    1. Younoh Kim & James Manley & Vlad Radoias, 2017. "Medium- and Long-run Consequences of Pollution on Labor Supply: Evidence from Indonesia's Forest Fires of 1997," Working Papers 2017-02, Towson University, Department of Economics, revised Mar 2017.
    2. repec:spr:izalbr:v:6:y:2017:i:1:d:10.1186_s40172-017-0055-2 is not listed on IDEAS
    3. 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).

    More about this item

    Keywords

    pollution; labor supply; cost of pollution;

    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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