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

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  • Aragon,Fernando M.
  • Miranda Montero,Juan Jose
  • Oliva,Paulina

Abstract

This paper examines the effect of air pollution on labor supply in Lima, Peru. It focuses on fine particulate matter (PM2.5), an important pollutant for health according to the medical literature, and shows that moderate levels of pollution reduce hours worked for working adults. The research design takes advantage of rich household panel data in labor outcomes to address omitted variables and allows investigation of whether the response to air pollution is non-linear. The analysis finds that the effect of moderate pollution levels on hours worked is concentrated among households with susceptible dependents, that is 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. Further evidence of this mechanism is provided using DHS data on children morbidity for the same time period. Finally, no evidence is found 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

  • Aragon,Fernando M. & Miranda Montero,Juan Jose & Oliva,Paulina, 2016. "Particulate matter and labor supply : the role of caregiving and non-linearities," Policy Research Working Paper Series 7658, The World Bank.
  • Handle: RePEc:wbk:wbrwps:7658
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. 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.
    2. 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.
    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).
    4. 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.
    5. 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.
    6. Künn, Steffen & Palacios, Juan & Pestel, Nico, 2019. "Indoor Air Quality and Cognitive Performance," IZA Discussion Papers 12632, Institute of Labor Economics (IZA).
    7. 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.
    8. 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.
    9. 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.
    10. 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).

    More about this item

    Keywords

    Environment and Health; Labor Markets; Pollution Management&Control; Rural Labor Markets; Brown Issues and Health;

    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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