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

By Rema Hanna, Paulina Oliva. 2011

675 citations recorded by the source corpus.

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.

Subfields: Economics and Econometrics, Health, Toxicology and Mutagenesis, Transportation

View Paper: https://www.semanticscholar.org/paper/f4d319776fce9596d07f8e9baf13bb60747a84e4

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Citations in the corpus

From growth to green growth. (2011, positive): “But environmental policies can also increase L, for instance because better water and air quality improves worker health condition (Hanna, 2011).”
Truth-telling by Third-party Auditors and the Response of Polluting Firms: Experimental Evidence from India* (2013, neutral): “Such pollution has been shown to be harmful to labor productivity and health (Hanna and Oliva, 2011; Graff-Zivin and Neidell, 2012; Greenstone and Hanna, 2013; Chay and Greenstone, 2003; Chen et al., 2013).”
Every Breath You Take—Every Dollar You’ll Make: The Long-Term Consequences of the Clean Air Act of 1970 (2017, positive): “…relationship between pollution and economic outcomes,4 there is very little work that examines how the shortrun benefits of environmental policy may persist in the long run.5 4 For example, Hanna and Oliva (2011) examine labor supply, while Graff Zivin and Neidell (2012) study labor productivity.”
The unintended impacts of agricultural fires: Human capital in China (2019, positive): “Given the emergent literature showing that pollution can also harm a range of other human capital outcomes (e.g., Graff Zivin; Neidell, 2012; Sanders, 2012; Hanna and Oliva, 2015; Stafford, 2015; Chang et al., 2016, 2019; Ebenstein et al., 2016; Bharadwaj et al., 2017; Austin et al., 2019), the goal”
Polluting Industries and Agricultural Productivity: Evidence from Mining in Ghana (2016, positive): “15 Finally, recent studies find evidence of a negative impact of air pollution on labour supply and productivity (Graff Zivin and Neidell, 2012; Hanna and Oliva, 2011), mostly due to its effect on human health.”
Does the effect of pollution on infant mortality differ between developing and developed countries? evidence from mexico city (2016, background): “Moreover, Hanna and Oliva (2015) show that sorting is not a large concern within Mexico City as very few households move across census blocks, which are an even smaller geographic unit than municipalities.”
Something in the Air: Pollution and the Demand for Health Insurance (2018, background): “(Graff Zivin and Neidell (2012), Hanna and Oliva (2015), Chang, Graff Zivin, Gross, and Neidell (2014, 2016)), student test scores (Lavy, Ebenstein, and Roth (2014)), and crime (Herrnstadt and Muehlegger (2015)). Finally, our results provides evidence in support of the hypothesis put forth in Loewen”
Particulate matter and labor supply: the role of caregiving and non-linearities (2016, background): “These challenges have been addressed in a previous study with the help of an exogenous and sudden change in air pollution in Mexico city in the early nineties (Hanna and Oliva, 2015).”
Environment, Health, and Human Capital (2013, positive): “A blossoming literature has begun to make these links more explicit by examining outcomes ranging from labor supply and productivity to cognitive formation and performance (Graff Zivin and Neidell 2012; Hanna and Oliva 2011; Lavy, Ebenstein, and Roth 2012; Almond, Edlund, and Palme 2009).”
Willingness to Pay for Clean Air: Evidence from Air Purifier Markets in China (2020, neutral): “Such severe air pollution causes great negative impacts on various economic outcomes, including infant mortality (Jayachandran 2009; Arceo, Hanna, and Oliva 2012; Greenstone and Hanna 2014), life expectancy (Chen et al. 2013; Ebenstein et al. 2017), and labor supply (Hanna and Oliva 2015).”