Effect of Air Pollution on Female Labor Supply: An Empirical Analysis Based on Data of Labor Force Dynamic Survey of China

The current study investigates the relationship between air pollution and female labor supply using China Labor Force Dynamic Survey Data (CLDS). The two-stage least squares method (2SLS) was used to approach the study objective. Moreover, the maximum wind speed was used as an instrumental variable for air pollution to solve the endogenous problem. The results found that air pollution directly impacted on female labor supply and working hours. The regression results confirmed a negative and significant impact of air pollution on female labor participation. Furthermore, the labor supply behavior of middle-aged and elderly women was significant and positively related to air pollution, while the labor supply behavior of young women had a negative relationship with air pollution. The study results stress the Chinese government to implement rigorous air pollution regulations to improve air quality. Furthermore, it is necessary to improve the female labor supply to maintain economic activities.