According to economists from the National University of Singapore (NUS), exposure to air pollution lowers employee productivity.

The economists, led by Associate Professor Alberto Salvo from the Department of Economics at the NUS Faculty of Arts and Social Sciences, investigated the socioeconomic implications from prolonged exposure to air pollution.

For one year the NUS team gathered data from two textile mills in China, one located in Henan, and another in Jiangsu. In those mills, employee productivity was measured by fabric output. The team analyzed employee output records, including how many pieces of fabric were produced each day by each employee.

That information was compared to data concerning particulate concentrations, an indicator of air pollution severity. The economists estimated employee particulate concentration exposure by measuring the number of fine particulates under 2.5 μm in diameter (PM2.5) present in the air.

At both mills pollution levels were, by United States' standards, consistently high, but with day-to-day fluctuations. Yet, at one location, PM2.5 levels were on average seven times the 85 μg/m³ limit set by the U.S. Environmental Protection Agency, according to the economists.

"Most of us are familiar with the negative impact air pollution can have on health, but as economists, we wanted to look for other socioeconomic outcomes. Our aim with this research was to broaden the understanding of air pollution in ways that have not been explored. We typically think that firms benefit from lax pollution regulations, by saving on emission control equipment and the like; here we document an adverse effect on the productivity of their work force,” said Salvo.

Based on their findings, economists believe that daily fluctuations in air pollution levels had little impact on worker productivity. Yet, when exposure lasted for 30 days or more, the team noticed a drop in productivity.

"We found that an increase in PM2.5, by 10 micrograms per cubic metre sustained over 25 days, reduces daily output by 1 per cent, harming firms and workers," said Associate Professor Haoming Liu, another study author. "The effects are subtle but highly significant."

Though unable to explain this trend, the economists suggested that prolonged air pollution exposure affects the mood and well-being of workers and thus, their productivity.

The study is published in the American Economic Journal: Applied Economics.