The Productivity Consequences of Pollution-Induced Migration in China

We quantify how pollution affects aggregate productivity and welfare in spatial equilibrium. We show that skilled workers in China emigrate away from polluted cities. These patterns are evident under various empirical specifications, such as when instrumenting for pollution using upwind power plants, or thermal inversions. Pollution changes the spatial distribution of skilled and unskilled workers, and wage returns by location. We quantify the loss in aggregate productivity due to this re-sorting by estimating a spatial equilibrium model. Counterfactual simulations show that reducing pollution increases productivity through spatial re-sorting by approximately as much as the direct health benefits of clean air. (JEL J24, J31, J61, P25, P28, Q53, R23)

• Publication year

  2021

• Venue

  Social Science Research Network

• Publication date

  2021-01-01

• Fields of study

  Economics, Environmental Science

• Identifiers
  DOI 10.3386/W28401
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

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