Air Pollution and the Labor Market: Evidence from Wildfire Smoke / Mark Borgschulte, David Molitor, Eric Zou.

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Borgschulte, Mark

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TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w29952.Publication details: Cambridge, Mass. National Bureau of Economic Research 2022.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: We study how air pollution impacts the U.S. labor market by analyzing effects of drifting wildfire smoke that can affect populations far from the fires themselves. We link satellite smoke plumes with labor market outcomes to estimate that an additional day of smoke exposure reduces quarterly earnings by about 0.1 percent. Extensive margin responses, including employment reductions and labor force exits, can explain 13 percent of the overall earnings losses. The implied welfare cost of lost earnings due to air pollution exposure is on par with standard valuations of the mortality burden. The findings suggest that labor market channels warrant greater consideration in policy responses to air pollution.

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Previous	nber w2995 Tying, Foreclosure, and Exclusion /	nber w29950 Additive Growth /	nber w29951 A Comparative Perspective on Long-Term Care Systems /	nber w29952 Air Pollution and the Labor Market: Evidence from Wildfire Smoke /	nber w29953 Partially Linear Models under Data Combination /	nber w29954 The Inherent Trade-Off Between the Environmental and Anti-Poverty Goals of Payments for Ecosystem Services /	nber w29955 Modeling the Great Recession as a Bank Panic: Challenges /	Next

April 2022.

We study how air pollution impacts the U.S. labor market by analyzing effects of drifting wildfire smoke that can affect populations far from the fires themselves. We link satellite smoke plumes with labor market outcomes to estimate that an additional day of smoke exposure reduces quarterly earnings by about 0.1 percent. Extensive margin responses, including employment reductions and labor force exits, can explain 13 percent of the overall earnings losses. The implied welfare cost of lost earnings due to air pollution exposure is on par with standard valuations of the mortality burden. The findings suggest that labor market channels warrant greater consideration in policy responses to air pollution.