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Dirty money: Is there a wage premium for working in a pollution intensive industry?

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  • Matthew Cole
  • Robert Elliott
  • Joanne Lindley

Abstract

Within a compensating wage differential framework we investigate whether there is a wage premium for working in a pollution intensive industry. Our results for the economy as a whole suggest a small wage premium of approximately one quarter of one percent associated with the risk of working in a dirty job. This premium rises to over fifteen percent for those individuals who work in one of the five dirtiest industries. We also find evidence of a fatal risk wage premium, providing estimates of the value of a statistical life of between £12 million and £19 million (2000 prices).
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  • Matthew Cole & Robert Elliott & Joanne Lindley, 2009. "Dirty money: Is there a wage premium for working in a pollution intensive industry?," Journal of Risk and Uncertainty, Springer, vol. 39(2), pages 161-180, October.
    • Handle: RePEc:kap:jrisku:v:39:y:2009:i:2:p:161-180
    DOI: 10.1007/s11166-009-9077-x
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    More about this item

    Keywords

    Compensating wage differentials; Pollution; Value of statistical life; J28; J31; Q52;
    All these keywords.

    JEL classification:

    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

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