Particulate Pollution and the Productivity of Pear Packers

Abstract

We study the effect of outdoor air pollution on the productivity of indoor workers at a pear-packing factory. Increases in fine particulate matter (PM2.5), a pollutant that readily penetrates indoors, leads to significant decreases in productivity, with effects arising at levels below air quality standards. In contrast, pollutants that do not travel indoors, such as ozone, have little, if any, effect on productivity. This effect of outdoor pollution on indoor worker productivity suggests an overlooked consequence of pollution. Back-of-the-envelope calculations suggest the labor savings from nationwide reductions in PM2.5 generated a sizable fraction of total welfare benefits. (JEL D24, J24, L66, Q13, Q51, Q53)