Heads up: does air pollution cause workplace accidents?

Victor Lavy, Genia Rachkovski and Omry Yoresh

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Literature has shown that air pollution can have short- and long-term adverse effects on physiological and cognitive performance. In this study, we estimate the effect of increased pollution levels on the likelihood of accidents at construction sites, a significant factor related to productivity losses in the labor market. Using data from all construction sites and pollution monitoring stations in Israel, we find a strong and significant causal effect of nitrogen dioxide (NO2), one of the primary air pollutants, on construction site accidents. We find that a 10-ppb increase in NO2 levels increases the likelihood of an accident by as much as 25 %. Importantly, our findings suggest that these effects are non-linear. While moderate pollution levels, according to EPA standards, compared to clean air levels, increase the likelihood of accidents by 138 %, unhealthy levels increase it by 377 %. We present a mechanism where the effect of pollution is exacerbated under conditions of high cognitive strain or reduced awareness. Finally, we perform a cost-benefit analysis, supported by a nonparametric estimation calculating the implied number of accidents due to NO2 exposure, and examine a potential welfare-improving policy to subsidize the closure of construction sites on highly polluted days.

Keywords: workplace accidents; labor productivity; air pollution; government policy (search for similar items in EconPapers)
JEL-codes: J01 R14 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2025-11-30
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Published in Journal of Public Economics, 30, November, 2025, 251. ISSN: 0047-2727

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