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The Labor Market Toll of Air Pollution (Master's Thesis)
The Labor Market Toll of Air Pollution (Master's Thesis)
A monthly change in one standard deviation of air pollution (PM 2.5) leads to a fall in the overall labor market size of 8%, a reduction in hiring of 3%, a fall in quitting rates of 5%, and a rise in wages of 1%. The wage and firing rate results are less reliable because they vary with different specifications.
This paper follows an instrumental variable strategy using wind currents and meteorological data to evaluate the impact of air pollution on several Brazilian labor market outcomes. I also include controls for wind speed, humidity, temperature, and rainfall. There are also municipality FE, state-month FE, and year-month FE. Older workers, women, and low-skill employees are more heavily impacted than others.
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