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Particulate Matter and Labor Supply: The Role of Caregiving and Non-linearities
November 2, 2016Poverty and Applied Microeconomics Seminar Series

Speaker: Fernando Aragon is an Assistant Professor of Economics at Simon Fraser University, Canada. More »

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

Paper»

Last Updated: Oct 28, 2016

The Poverty and Applied Micro Seminar Series is a weekly series hosted by the World Bank's research department. The series invites leading researchers in applied microeconomics from the fields of poverty, human development and public service delivery, agriculture and rural development, political economy, behavioral economics, private sector development, and a range of other fields to present the results of their most recent research in a seminar format. The full list of seminars can be viewed here.

Event Details
  • Date: November 2, 2016
  • Location: MC 3-570
  • Time: 12:30 - 2:00 pm
  • CONTACT: Shweta Mesipam
  • smesipam@worldbank.org



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