Arsenic Mitigation in Bangladesh: A Houseold Labor Market Approach

A major environmental tragedy of modern times is the widespread arsenic contamination of shallow drinking water wells in Bangladesh. High levels of arsenic present in many wells went unrecognized for years. Now large numbers of people show a range of symptoms associated with chronic arsenic exposure. Most of the economics literature follows an epidemiological approach effectively monetizing a dose response relation. We take a different approach, given widespread exposure, and examine impacts on household labor supply. We find significant effects broadly consistent with available epidemiological information in terms of the percent of the population impacted and which demographic groups are most impacted. The nature of the arsenic contamination provides a high quality statistical instrument that identifies a labor supply reduction of over 8%. Particular attention is paid to large substitution effects involving within household labor supply as this is the primary means of insurance among poor households in developing countries.