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The impact of air pollution on labour productivity in France

Clara Kögel

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

Abstract: This paper investigates the effect of air pollution on labour productivity in French establishments in both manufacturing and non-financial market services sectors from 2001 to 2018. An instrumental variable approach based on planetary boundary layer height and wind speed allows identifying the causal effect of air pollution on labour productivity. The finding shows that a 10% increase in fine particulate matter leads, on average, to a 1.5% decrease in labour productivity, controlling for firm-specific characteristics and other confounding factors. The analysis also considers different dimensions of heterogeneity driving this adverse effect. The negative effect of pollution is mainly driven by service-intensive firms and sectors with a high share of highly skilled workers. This finding is in line with the expectation that air pollution affects cognitive skills, concentration, headache, and fatigue in non-routine cognitive tasks. Compared to an estimation of the marginal abatement cost of PM 2.5 reductions by the Air Quality Directive 2008/50/EC, gains only from the labour productivity channel are equivalent to one-third of the abatement cost over the implementation period. All in all, these estimates suggest that the negative impact of air pollution is much larger than previously documented in the literature

Keywords: air pollution; labour productivity; planetary boundary layer height (search for similar items in EconPapers)
JEL-codes: J24 O13 Q51 Q52 Q53 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2022-10
New Economics Papers: this item is included in nep-eff, nep-ene, nep-env and nep-eur
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Downloads: (external link)
http://mse.univ-paris1.fr/pub/mse/CES2022/22020.pdf (application/pdf)
https://shs.hal.science/halshs-03837884

Related works:
Working Paper: The impact of air pollution on labour productivity in France (2022) Downloads
Working Paper: The impact of air pollution on labour productivity in France (2022) Downloads
Working Paper: The impact of air pollution on labour productivity in France (2022) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:mse:cesdoc:22020

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