The impact of perceived air pollution on labour supply: Evidence from China

Abstract

Air pollution and ageing populations are two of the most important issues facing in the development of all countries around the world, and the resulting debate between air pollution and labour supply has become increasingly intense. This paper uses data from the 2017 China Migrants Dynamic Survey (CMDS data), exploring the impact of perceived air pollution on labour supply of the migrants based on the perspective of the heterogeneity of different groups' sensitivity to air pollution. After overcoming the reverse causality between perceived air pollution and labour supply using an instrumental variables approach, we find that there is a significant negative effect of perceived air pollution on labour supply. At the same time, this negative effect shows some heterogeneity in terms of the presence of susceptible persons in the family, workers' income levels and household registration. Therefore, in the current economic and social development, in addition to improving measured air quality, it is also necessary to focus on improving the perceived air quality of citizens, as well as improving the working environment of the vulnerable groups in the labour market and protecting their basic labour rights and interests, which is of positive significance for the continuation of the demographic dividend and providing impetus for high-quality and sustainable economic development.