Air Pollution and the Labor Market: Evidence from Wildfire Smoke

Mark Borgschulte, David Molitor, Eric Yongchen Zou

Research output: Contribution to journalArticlepeer-review


We study how air pollution impacts the U.S. labor market by analyzing the effects of drifting wildfire smoke. We link satellite-based smoke plume data with labor market outcomes to estimate that an additional day of smoke exposure reduces quarterly earnings by about 0.1 percent. Extensive margin responses, including employment reductions and labor force exits, explain 13 percent of the overall earnings losses. The implied welfare costs from lost earnings due to air pollution exposure is on par with standard valuations of the mortality burden. The findings highlight the importance of labor market channels in air pollution policy responses.
Original languageEnglish (US)
Pages (from-to)1-46
JournalReview of Economics and Statistics
StateE-pub ahead of print - Sep 27 2022


  • air pollution
  • wildfires
  • labor market


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