Ulrich Wagner, University of Mannheim

"Urban Air Pollution and Sick Leaves: Evidence from Social Security Data"

Abstract

We estimate the impact of air pollution on work days lost among workers affiliated to Spain’s universal sickness-leave insurance. We find that a 10% reduction in pollution reduces sick leaves by 0.8% of the mean. This effect is larger among workers with pre-existing medical conditions. Our estimates imply that improvements in urban air quality between 2005 and 2014 reduced worker absence by 5.6 million days, saving €0.5 billion in foregone production. We argue that this is a naive estimate of the underlying health impact because it does not account for shirking and presenteeism. We exploit within-worker variation in job security which shifts incentives for such behaviors, independently of pollution shocks, to identify their effect on sick-leave taking. We find evidence of shirking on low-pollution days, which biases the pollution-absence gradient towards zero among workers with high job security. Accounting for this doubles our estimate of work days lost due to air pollution.

Contact person: Frikk Nesje