Abstract
Even as policymakers seek to encourage economic development by addressing misallocation due to frictions in labor markets, the associated production externalities—such as air pollution—remain unexplored. Using a regression discontinuity design, we show access to rural roads increases agricultural fires and particulate emissions. Farm labor exits are a likely mechanism: rural roads cause movement of workers out of agriculture and induce farmers to use fire—a labor-saving but polluting technology—to clear agricultural residue or to make harvesting less labor-intensive. Overall, the adoption of fires due to rural roads increases infant mortality rates by 5.5 percent in downwind locations. (JEL D62, J43, O13, O18, Q12, Q51, Q53)
Published Version
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