Theory and Policy Seminar, Series 210

National Academy of Development and Strategy (NADS), RUC

Theory and Policy Seminar, Series 210

Air Pollution and Labor Productivity: Insights from Off-work Activities

Reported by: ZHANG Xiaoyu (School of Economics, University of Nottingham Ningbo China)

Moderator: QIN Cong (National Academy of Development and Strategy, Renmin University of China)

Time: May 28, 2025 (Wednesday) 14:00-15:30

Venue: Room 1133, 11th Floor, Lide Building

Abstract:

This paper examines the impact of air pollution on labor productivity in an indoor production setting within a factory equipped with air purification systems. Utilizing unique production and attendance records from a major manufacturing facility in eastern China, matched with hourly air pollution data from 2018 to 2019, we find that despite high indoor air quality, increased outdoor air pollution reduces labor productivity on the day of exposure. Our empirical analysis offers a novel perspective on the underlying mechanism: air pollution disrupts workers’ off-work activities, leading to insufficient relaxation that subsequently impairs job performance. Compared with day-shift workers, night-shift workers are particularly vulnerable to this effect, as their off-work hours coincide with the daytime, when pollution levels are more perceptible. This mechanism is further supported by worker-level attendance data, which indicates that air pollution leads to delays in workers’ arrival times but does not affect their departure times, reinforcing the hypothesis that insufficient relaxation during off-work hours contributes to productivity losses.