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The Effect of Pollution on Labor Supply: Evidence from a Natural Experiment in Mexico City

Rema Hanna () and Paulina Oliva ()

No 225, CID Working Papers from Center for International Development at Harvard University

Abstract: Moderate effects of pollution on health may exert an important influence on labor market decisions. We exploit exogenous variation in pollution due to the closure of a large refinery in Mexico City to understand how pollution impacts labor supply. The closure led to an 8 percent decline in pollution in the surrounding neighborhoods. We find that a one percent increase in sulfur dioxide results in a 0.61 percent decrease in the hours worked. The effects do not appear to be driven by labor demand shocks nor differential migration as a result of the closure in the areas located near the refinery.

Keywords: Mexico City; Pollution; Labour Supply (search for similar items in EconPapers)
JEL-codes: O0 Q0 Q5 Q53 (search for similar items in EconPapers)
Date: 2011-08
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Related works:
Journal Article: The effect of pollution on labor supply: Evidence from a natural experiment in Mexico City (2015) Downloads
Working Paper: The Effect of Pollution on Labor Supply: Evidence from a Natural Experiment in Mexico City (2011) Downloads
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