Jobs in the Smog: Firm Location and Workers’ Exposure to Pollution in African Cities

Vittorio Bassi, Matthew Kahn, Nancy Lozano-Gracia, Tommaso Porzio and Jeanne Sorin

No 30536, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We show that the organization of production prevalent in Ugandan cities increases workers’ exposure to urban pollution. Using new granular spatial data on air pollution and manufacturing firms, we document that small firms cluster along the busiest and most polluted roads because road traffic bundles air pollution with customer access. Even within neighborhoods, cleaner areas exist, yet jobs are in the smog. A spatial equilibrium model rationalizes these patterns, with firms capturing sizable profit gains from polluted locations while workers receive limited compensation for the exposure. Our results imply that the welfare costs of urban air pollution in developing-country cities may be substantially larger than city-level averages suggest.

JEL-codes: Q4 Q53 (search for similar items in EconPapers)
Date: 2022-10
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