Severe Air Pollution and Labor Productivity: Evidence from Industrial Towns in China

We examine day-to-day fluctuations in worker-level output at two manufacturing sites in China. Ambient fine-particle (PM2.5) pollution is severe but significantly variable, largely due to exogenous atmospheric ventilation. We obtain an insignificant immediate output response from concurrent (same-shift) variation in particle pollution. We then allow worker outcomes to respond to day-to-day variation in pollution with up to 30 days of delay. We uncover statistically significant adverse output effects from more prolonged exposure, but effects are not large. A substantial + 10 μg/m 3 PM2.5 variation sustained over 25 days reduces daily output by 1 percent. (JEL J24, O13, P23, P25, P28, Q51, Q53)