Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/307168 
Year of Publication: 
2024
Series/Report no.: 
IZA Discussion Papers No. 17344
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
This paper investigates the impact of air pollution on reservation wages. We use rich survey data on unemployed job seekers in Germany and exploit variation in individual exposure to fine particulate matter (PM10) based on the quasi-random allocation of interview slots to individuals. Our results show that an increase in PM10 by one standard deviation (corresponding to 12 μg/m3) reduces the reservation wage by approximately 1.2%. We further provide evidence that PM10 pollution decreases job seekers' search effort, risk tolerance and patience, which serve as potential mechanisms through which PM10 exposure negatively affects the reservation wage of unemployed job seekers.
Subjects: 
reservation wage
air pollution
job search
JEL: 
Q53
J64
Document Type: 
Working Paper

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