The Effect of Pollution on Labor Supply: Evidence from a Natural Experiment in Mexico


Hanna, Rema, and Paulina Oliva. 2015. “The Effect of Pollution on Labor Supply: Evidence from a Natural Experiment in Mexico.” The Journal of Public Economics 122 (February 2015): 68-79.


Much of what we know about the marginal effect of pollution on infant mortality is derived from developed country data. However, given the lower levels of air pollution in developed countries, these estimates may not be externally valid to the developing country context if there is a nonlinear dose relationship between pollution and mortality or if the costs of avoidance behavior differs considerably between the two contexts. In this paper, we estimate the relationship between pollution and infant mortality using data from Mexico. We find that an increase of 1 parts per billion in carbon monoxide (CO) over the last week results in 0.0032 deaths per 100,000 births, while a 1 μg/m3 increase in particulate matter (PM10) results in 0.24 infant deaths per 100,000 births. Our estimates for PM10 tend to be similar (or even smaller) than the U.S. estimates, while our findings on CO tend to be larger than those derived from the U.S. context. We provide suggestive evidence that a non-linearity in the relationship between CO and health explains this difference.

Publisher's Version

CID Working Paper: # 225
NBER Working Paper: # 17302
JEL Class: I15, O1, Q53
Keywords: pollution, infant mortality, mexico, health
DOI: 10.1016/j.jpubeco.2014.10.004
Last updated on 11/17/2015