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Severe air pollution makes workers less productive, study finds

Conventional wisdom dictates that firms benefit from lax pollution regulations; however, the NUS study highlights that a polluted environment can have economic costs in terms of lost productivity of the workforce
by TR Pakistan

Researchers from the National University of Singapore (NUS) have completed an extensive study which has revealed that exposure to air pollution over several weeks can reduce employee productivity.

Associate Professor Alberto Salvo from the Department of Economics at the NUS Faculty of Arts and Social Sciences and an author of the study, explained, “Most of us are familiar with the negative impact air pollution can have on health, but as economists, we wanted to look for other socioeconomic outcomes. Our aim with this research was to broaden the understanding of air pollution in ways that have not been explored. We typically think that firms benefit from lax pollution regulations, by saving on emission control equipment and the like; here we document an adverse effect on the productivity of their workforce.”

The NUS team spent over a year gathering information from factories in China. This involved interviewing managers at one dozen firms in four separate provinces, before gaining access to data for two factories, one in Henan and the other in Jiangsu.

These factories were textile mills where workers were paid according to each piece of fabric they produced. Researchers compared how many pieces each worker produced each day to measures of the concentration of particulate matter that the worker was exposed to over time.

Read more: Brain Development in 17 Million Infants at Risk Due to Air Pollution

Pollution levels at the two factory locations varied significantly from day to day, but overall they were consistently high. At one location, PM2.5 levels averaged about seven times the safe limit set by the US Environmental Protection Agency, at 85 micrograms per cubic metre. The team found that daily fluctuations in pollution did not immediately affect the productivity of workers. However, when they measured for more prolonged exposures of up to 30 days, a definite drop in output can be seen. The study was careful to control for confounding factors such as regional economic activity.

“We found that an increase in PM2.5, by 10 micrograms per cubic metre sustained over 25 days, reduces daily output by 1 per cent, harming firms and workers,” says Associate Professor Liu. “The effects are subtle but highly significant.”

Thus far researchers have not given any conclusive statements about what they think drives productivity down in polluted settings.

“Besides entering via the lungs and into the bloodstream, there could also be a psychological element,” says Liu. “Working in a highly polluted setting for long periods of time could affect your mood or disposition to work.”

“Laborers in China can be working under far worse daily conditions while maintaining levels of productivity that look comparable to clean air days. If the effect were this pronounced and this immediate, we think that factory and office managers would take more notice of pollution than transpired in our field interviews. Therefore, our finding that pollution has a subtle influence on productivity seems realistic,” Liu added.

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