:: FROM THE CHARLES | winter 2013 | www.hks.harvard.edu
Air Quality Linked to Productivity
TEACHING Two years ago, Rema
Hanna, associate professor of public policy, and Paulina Oliva of the University of California, Santa Barbara, began a study looking at the relationship between air quality and worker absenteeism in Mexico City. The results of their study, Hanna believes, will help inform discussions around the world concerning air quality regulation. Rema Hanna She talks about her research below.
What made you decide to look at this particular issue? A large portion of what I do is thinking about how to provide public services to the poor. This is a study about how to regulate the environment to improve conditions for poor households. It’s a topic I’ve cared about for a very long time. Environmental quality is one of the most important services that governments provide.
What made you choose Mexico City to conduct your research? Mexico City has rich data. In the early 1990s, the city closed a refinery that produced roughly 35 percent of the city’s oil. Officials estimated that this refinery was responsible for 2 percent of the city’s pollution. We were able to collect labor market data from the labor force surveys that the Mexican government conducted and at the same time air pollution quality data from Mexico City.
What did you find? The results showed that the refinery’s closing had a pretty large effect on productivity. We found a 20 percent reduction in air pollution, and, during this same time period, people worked, on average, an hour more per week. This result is driven not just by the workers’ health; there is suggestive evidence that it is driven in part by the health of their kids. If their kids stay home from school because they’re sick, then they stay home too.
r on the web http://ken.sc/r-hanna
How do you hope these findings will be used? Often, when we’re thinking about environmental regulations in developing countries, there’s a fear that if you impose regulations, you’re going to hinder business development and growth. At the same time, however, there is the possibility that if workers are healthier, they might be less likely to be absent from work. When discussing environmental regulation, it’s important to understand that you might achieve greater productivity gains from lower levels of pollution. The study provides contributing evidence that improving air quality is not trivial to work patterns. We find a pretty large effect, so hopefully it will encourage policymakers to do more to regulate environmental conditions. s SA
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