Air Pollution and the Labor Market: Evidence from Wildfire Smoke

Mark Borgschulte, David Molitor and Eric Zou
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Mark Borgschulte: University of Illinois and IZA

The Review of Economics and Statistics, 2024, vol. 106, issue 6, 1558-1575

Abstract: We study how air pollution impacts the U.S. labor market by analyzing the effects of drifting wildfire smoke. We link satellite-based smoke plume data with labor market outcomes to estimate that an additional day of smoke exposure reduces quarterly earnings by about 0.1%. Extensive margin responses, including employment reductions and labor force exits, explain 13% of the overall earnings losses. The implied welfare costs from lost earnings due to air pollution exposure is on par with standard valuations of the mortality burden. The findings highlight the importance of labor market channels in air pollution policy responses.

Date: 2024
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Working Paper: Air Pollution and the Labor Market: Evidence from Wildfire Smoke (2022)
Working Paper: Air Pollution and the Labor Market: Evidence from Wildfire Smoke (2022)
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