Research Insights: How Do High Levels of Fine Particulate Matter Impact Daily Labor Supply in Mexico City?

There is a negative, non-linear relationship between fine particulate matter (PM 2.5) and same-day labor supply, with strong effects on extremely polluted days. Workers partially compensate for lost hours by increasing their labor supply on days that follow high-pollution days. Informal workers reduce their labor supply less than formal workers on high-pollution days and compensate less on the following days. This suggests that informal workers may experience greater exposure to high pollution and greater reductions in labor supply and income.