Air Pollution and the Labor Market: Evidence from Wildfire Smoke

Mark Borgschulte; David Molitor; Eric Yongchen Zou

doi:10.1162/rest_a_01243

journal article Nov 01, 2024

Air Pollution and the Labor Market: Evidence from Wildfire Smoke

Mark Borgschulte David Molitor Eric Yongchen Zou

Review of Economics and Statistics Vol. 106 No. 6 pp. 1558-1575 · MIT Press

View at Publisher Save 10.1162/rest_a_01243

Abstract

Abstract
We study how air pollution impacts the U.S. labor market by analyzing the effects of drifting wildfire smoke. We link satellite-based smoke plume data with labor market outcomes to estimate that an additional day of smoke exposure reduces quarterly earnings by about 0.1%. Extensive margin responses, including employment reductions and labor force exits, explain 13% of the overall earnings losses. The implied welfare costs from lost earnings due to air pollution exposure is on par with standard valuations of the mortality burden. The findings highlight the importance of labor market channels in air pollution policy responses.

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Details

Published: Nov 01, 2024
Vol/Issue: 106(6)
Pages: 1558-1575

Authors

M

Mark Borgschulte

University of Illinois and IZA

D

David Molitor

University of Illinois and NBER

E

Eric Yongchen Zou

University of Michigan and NBER

Cite This Article

Mark Borgschulte, David Molitor, Eric Yongchen Zou (2024). Air Pollution and the Labor Market: Evidence from Wildfire Smoke. Review of Economics and Statistics, 106(6), 1558-1575. https://doi.org/10.1162/rest_a_01243

Air Pollution and the Labor Market: Evidence from Wildfire Smoke

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