Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/290073 
Year of Publication: 
2022
Series/Report no.: 
IDB Working Paper Series No. IDB-WP-1295
Publisher: 
Inter-American Development Bank (IDB), Washington, DC
Abstract: 
We use high-frequency data on fine particulate matter air pollution (PM 2.5) at the locality level to study the effects of high pollution on labor supply decisions and hospitalizations for respiratory disease in the metropolitan area of Mexico City. We document a negative, non-linear relationship between PM 2.5 and same-day labor supply, with strong effects on days with extremely high pollution levels. On these days, the average worker experiences a reduction of around 7.5% of working hours. Workers partially compensate for lost hours by increasing their labor supply on days that follow high-pollution days. Informal workers reduce their labor supply less than formal workers on high-pollution days and also compensate less on the following days. This suggests that informal workers may experience greater exposure to high pollution and greater reductions in labor supply and income. We provide evidence that reductions in labor supply due to high pollution are consistent with avoidance behavior and that income constraints may play an important role in workers' labor supply decisions.
Subjects: 
Air pollution
Labor supply
Informal workers
Health
Mexico
JEL: 
Q52
Q53
J22
J46
I14
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

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