Productivity loss amid invisible pollution

Ground-level ozone is a continuing problem worldwide, but there is insufficient research about the influence of ozone pollution on labor productivity in developing countries. Couriers are important for e-commerce and the rapidly developing express delivery industry around the world. Yet, due to their typical outdoor working environments, they are susceptible to the health effects of ozone pollution. We investigate the effect of ozone pollution on outdoor worker productivity in the service sector using a unique panel dataset of courier productivity from a top-five express delivery company in China. Using an instrumental variable constructed from ozone pollution of nearby upwind cities, we find that a 1 standard deviation increase in daily ozone pollution decreases courier productivity by 6.8%. The same increase in ozone over the previous 30 day period decreases worker productivity by 23.7%. Our findings emphasize an under-researched but important part of the socioeconomic costs of ozone pollution, and call for policy attention on the coordinated management of ozone pollution and particulate matters in developing countries.