Severe Air Pollution and Labor Productivity

Arbeitspapier

We examine day-to-day fluctuations in worker-level output over 15 months for a panel of 98 manufacturing workers at a plant located in an industrial city in Hebei province, north China. Long-term workers earn piece-rate wages, with no base pay or minimum pay, for homogeneous tasks performed over fixed 8-hour shifts. Over the sample period, ambient fine-particle (PM2.5) mass concentrations measured at an outdoor air monitor located 2 km from the plant ranged between 10 and 773 micrograms per cubic meter (µg/m3, 8-hour means), variation that is an order of magnitude larger than what is observed in the rich world today. We document large reductions in productivity, of the order of 15%, over the first 200 µg/m3 rise in PM2.5 concentrations, with the drop leveling off for further increases in fine-particle pollution. A back-of-the-envelope calculation suggests that labor productivity across 190 Chinese cities could rise by on average 4% per year were the distributions of hourly PM2.5 truncated at 25 µg/m3. We also find reduced product quality as pollution rises. Our model allows for selection into work attendance, though we do not find particle pollution to be a meaningful determinant of non-attendance, which is very low in our labor setting. Subsequent research should verify the external validity of our findings.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 8916

Classification and Topics

• Classification: Wirtschaft ; Human Capital; Skills; Occupational Choice; Labor Productivity ; Valuation of Environmental Effects ; Pollution Control Adoption and Costs; Distributional Effects; Employment Effects ; Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling ; Environment and Growth ; Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
• Subject: PM2.5 ; labor supply ; labor productivity ; air pollution ; environmental damage

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Li, Teng ; Liu, Haoming ; Salvo, Alberto
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/110177
• Last update: 10.03.2025, 11:43 AM CET