The study, released this week as a white paper by the National Bureau of Economic Research, profited from the cooperation of a large Chinese travel firm, Ctrip International, which shared data on its workers’ performance with the researchers. It was conducted by Tom Chang of the Marshall School of Business at the University of Southern California with colleagues from the University of California-San Diego and Columbia.
“Our analysis reveals a statistically significant, negative impact of pollution on the productivity of workers at the firm,” the researchers wrote. “A 10-unit increase in the air pollution index (API) decreases the number of daily calls handled by a worker by 0.35 percent on average. … To our knowledge, these results are the first evidence of an effect of pollution on white-collar labor.”
It was already known that workers outdoors suffer badly from the effects of air pollution, Chang says. What was new was to extend the finding to workers in the knowledge and service economy, whose indoor job settings might lead one to think they’re more insulated.
“We did the outdoor workers first, and then we moved into blue collar work, and now we’re into white collar work,” Chang says. “One thing is that, each step of the way, the magnitude of the effects has gone down. It affects blue collar workers more than it affects white collar workers.”
Nonetheless, the finest-sized pollution particles are more than capable of getting indoors. And accordingly, the study still found significant effects from particulate air pollution on indoor workers — and that economically, such impacts could be very consequential.
“Even though the size of the effect has gone down, when it comes to the value of what they contribute to, let’s say, GDP, it gets higher and higher,” Chang says.
The company that participated in the study, Ctrip, has call centers in both Shanghai and Nantong, with a random routing of calls to the different locations. This allowed for the setup of the study: By measuring the severity of air pollution in each city daily, and then relating that to the carefully logged calls of the call centers’ workers, it was possible to detect a statistical relationship between the air outdoors and productivity indoors.
In particular, the study found that the productivity drop-off showed up in the length of breaks that workers took between each call they logged. Workers usually took 66 calls per day on average, but slight deviations lower could occur if they paused longer between one call and the next. (Chang said most of the workers work a 9-to-5 shift, giving them hours roughly comparable to an office worker in the United States.)
The mechanism behind the observed phenomenon is probably not the same one that leads to deadly long term effects from particulate air pollution, but it’s related. At high levels of pollution, says Chang, people just don’t feel as good.
“Think about your job,” he says. “Would your productivity be affected if you had a slightly scratchy throat, your nose was running, your eyes were watering, the entire day? That’s the idea here.”
What is most striking is that the researchers suggest that the collective toll of air pollution on the economy, based on such numbers, could be dramatic. “A back-of-the-envelope calculation suggests that even a very modest drop in air pollution could increase productivity in the Chinese service sector by billions of dollars per year,” they write.
But it hardly stops with one sector in one (albeit massive) country: Los Angeles in 2014, for instance, saw 13 days when the air pollution index exceeded 150, a level at which the research found “consistent” negative effects on worker productivity.
“In 2014, the air quality index [in Los Angeles] exceeded the EPA standard on 90 days. If all of those days were brought into regulatory compliance, service sector productivity in the county of Los Angeles would have been $374 million larger,” the study concludes. “The sum of these impacts across all major metropolitan areas in the U.S. would be substantially higher.”