In its 2021 revision of global air quality guidelines, the World Health Organization noted that “the burden of disease resulting from air pollution also imposes a significant economic burden”. This is certainly true in India, where an estimated 18% of all deaths are attributable to air pollution. A growing body of work shows that exposure to air pollution can also have meaningful impacts on both physical and cognitive performance. Although these effects of air pollution are not diagnosable as diseases, they can have impacts on economic output and wellbeing that may be causing widespread but hard-to-detect harm to many Indians.
Some of these ‘non-health’ effects occur at the time of exposure and represent short-term reductions in performance, such as lower worker efficiency on especially polluted days. Other impacts represent accrued physiological damage that falls below the level of a medical diagnosis, but still impacts behaviour. From the policymaking perspective, the findings from this literature imply that even small reductions in air pollution exposure may have substantial economy-wide implications, since the number of people potentially affected by pollution is far larger than the number with associated medical conditions, and the thresholds at which damages begin are below those at which medical symptoms develop.
Short-term effects of greater air pollution across different industries
Greater air pollution exposure on a given day appears to reduce worker productivity in industries as disparate as garment production, agriculture, food processing, call centres and the court system. These short-term impacts on the productivity of on-site workers cannot be explained as the result of new or ongoing medical conditions caused by prolonged exposure, or of acute symptoms that make employees miss work. Rather, they are ‘non-health’ productivity effects on the workforce, separate from the effects of medical conditions that might result from long-run exposure. Beyond its effects on workers present on site, air pollution also appears to reduce labour supply, partly through health-related mechanisms and partly through costly migration to less-polluted areas.
The short-term productivity effects of air pollution do not seem to be limited to the subset of industries or locations that have so far been studied individually; estimates conducted at the regional level or with nationally comprehensive firm data also find meaningful impacts on overall output, which combine productivity and labour supply effects. Meaningful effects of air pollution on productivity are found even in settings where air pollution is significantly less severe than it is currently in India, suggesting that these productivity decrements may be operating on a significant share of the Indian workforce at any given time.
Why does air pollution reduce worker productivity across such a broad range of industries? The harmful effects of air pollution on the lungs and circulatory system might explain impacts on agricultural workers, but workers in white-collar occupations may instead be suffering from air pollution’s effects on cognition and decision-making. Several studies find evidence that air pollution reduces scores on a variety of academic and cognitive tests. These subtle cognitive difficulties may explain why air pollution seems to lead to increased behavioural biases among investors, while a hypothesised impact on impulse control may explain why higher air pollution appears to increase rates of some types of crime.
Long-term effects of air pollution on the wider population
The effects of air pollution mentioned so far are caused by short-term fluctuations in air quality. However, repeated exposure to air pollution can also reduce people’s capabilities in the longer term through accumulated damages, particularly when air pollution is present during gestation or early life. Such effects include negative impacts on academic performance as children, on college attendance, and on employment and earnings as adults. More research on the long-run effects of pollution is needed in developing countries, but existing studies have found that air pollution’s detrimental impact on child health contributes, for instance, to the significant problem of child stunting in India. Importantly, long-run impacts of pollution exposure are detectable even at the lower exposure levels found in the United States, suggesting that even many Indians whose exposure was not high enough to cause diagnosable stunting may still have suffered small but meaningful long-term reductions in their capabilities.
Discerning causation from correlation is an important part of this research. Researchers must confront the possibility that people exposed to higher levels of pollution also have other underlying factors that affect their productivity but are difficult to observe. For example, individuals exposed to higher levels of pollution may live in neighbourhoods with fewer job prospects. Many of the above studies use quasi-experimental research designs, which attempt to exploit variation in pollution that is uncorrelated with these unobserved factors, stemming from sources such as changing wind patterns, randomly occurring wildfires, environmental policy changes, or closures of pollution-emitting factories.
Managing the impact of air pollution in different contexts
Nevertheless, even when credibly identified, estimated pollution impacts need to be interpreted thoughtfully. The eventual net effect on outcomes may be reduced by behaviours like avoidance (staying inside on high-pollution days, buying air filters) and amelioration (spending more hours studying after failing a test in school). These behaviours may reduce pollution’s direct harms, but they represent real costs in time, money, or utility that are not captured by typical estimates.
Understanding how people in India respond to ambient pollution, and how they can be helped to respond appropriately, represents an important area for further research alongside efforts to establish which means of reducing pollution emissions are effective in India. These responses may differ widely by context; workers in Mumbai skyscrapers may be able to run their air through filters, but agricultural workers near burning stubble or workers in India’s many small informal businesses may have greater difficulties protecting themselves and in bearing the costs of adaptation. As a result of the likely difference in avoidance behaviour, air pollution may have very unequal impacts on productivity, potentially exacerbating existing income inequality.
More research is still needed to better understand the non-health effects of air pollution. There is not yet agreement on the exact nature of its cognitive effects, or on the prevalence and costs of avoidance and amelioration behaviours in particular settings. But a growing body of evidence suggests that while many Indians suffer from diseases caused by air pollution, still greater numbers may be negatively affected by air pollution even if they never notice its impacts or develop a specific disease.
 In fact, demand for such goods and services increases market output as a symptom of reduced welfare, making it important not to focus on production as a proxy for welfare in these settings.
A version of this article was published in Ideas for India. To learn more about the impacts of climate change and the potential pathways for sustainable growth tune in to LSE Environment Week.