Particulate Matter and Labor Supply : The Role of Caregiving and Non-Linearities
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...
| Main Authors: | , , |
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| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2016/04/26294380/particulate-matter-labor-supply-role-caregiving-non-linearities http://hdl.handle.net/10986/24233 |
| Summary: | 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. |
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