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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 17302, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: O1 Q0 Q5 Q53 (search for similar items in EconPapers)
Date: 2011-08
New Economics Papers: this item is included in nep-env, nep-lab and nep-lma
Note: EEE
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Published as Hanna, Rema & Oliva, Paulina, 2015. "The effect of pollution on labor supply: Evidence from a natural experiment in Mexico City," Journal of Public Economics, Elsevier, vol. 122(C), pages 68-79.

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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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