Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments May 20, 2018 erstellt
Description:
An emerging literature estimates air pollution's effects on productivity but only for small groups of workers of particular occupations or firms. To provide more comprehensive estimates necessary for nationwide policy analysis, we estimate effects for a nationally representative sample of all of China's manufacturing firms from 1998 to 2007 and capture all channels by which pollution influences productivity.We use thermal inversions as an instrument to estimate the causal effect of pollution on productivity. A one μg/m3 decrease in PM2.5 increases productivity by 0.82% with an elasticity of -0.44. Firms respond by hiring more workers attenuating the elasticity of output with respect to pollution to -0.17. Using the differential effect of China's accession into the WTO on coastal versus inner regions, we estimate the causal effect of output on pollution (elasticity of 1.43) to simulate the dynamic, general-equilibrium effects of PM2.5 yielding an elasticity of -0.31. Lowering PM2.5 by 1% nationwide through methods other than reducing manufacturing output would generate annual productivity increases of CNY 39.7 thousand for the average firm and CNY 6.3 billion or 0.043% of GDP across all firms