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Does Marijuana Change Young Brains?

Our latest podcast compared the costs of marijuana use to the costs of alcohol use.  A new study in the current issue of The Journal of Neuroscience argues that casual use of marijuana affects the developing brain.  Jason Koebler, writing for Vice, summarizes the findings:

High-resolution MRI scans of the brains of adults between the ages of 18-25 who reported smoking weed at least once a week were structurally different than a control group: They showed greater grey matter density in the left amygdala, an area of the brain associated with addiction and showed alterations in the hypothalamus and subcallosal cortex. The study also notes that marijuana use “may be associated with a disruption of neural organization.” The more weed a person reported smoking, the more altered their brain appeared, according to the Northwestern University and Harvard Medical School study, which was published in the Journal of Neuroscience.

The finding already has the study’s authors calling for states to reconsider legalizing the drug. Hans Breiter, the lead author, said he’s “developed a severe worry about whether we should be allowing anybody under age 30 to use pot unless they have a terminal illness and need it for pain.

(HT: The Daily Dish)


The Gender Wage Gap, by State

We have blogged and written extensively about the gender pay gap, much of which is not attributable to discrimination, as is commonly invoked. President Obama has taken up the cause; he recently signed two executive orders aimed at closing the gap.  Business Insider recently posted a state-by-state breakdown of the gender wage gap. It is interesting to look at but keep in mind the non-discriminatory factors that contribute to the gap, and therefore consider these numbers with some skepticism:

Wyoming has the biggest pay gap — the median male full-time worker made $51,932, and the median female full-time worker made $33,152. The male worker thus made 56.6% more than the female worker.

Washington, D.C. had the smallest gap — there, men make 11.0% more than women. Among the states, Maryland and Nevada had the smallest gaps, both at 17.2%.


The Supply Curve of Viking Raids

The new exhibition on the Vikings at the British Museum illustrates behavior along supply curves.  The local Anglo-Saxons decided that the best way to keep Viking raiders at bay was to buy them off—to pay tribute.  Perhaps unsurprisingly, this extra payoff merely induced a movement up the supply curve of Viking raids, as more raiding parties realized that there was money to be made by raiding English villages. Perhaps this is a lesson for modernity: don’t negotiate with terrorists!


Street-Fighting Math MOOC Is Open

My mathematically inclined readers are cordially invited to enroll in “6.SFMx: Street-Fighting Math,” which starts today on EdX. Like most (all?) MOOC courses, it is free and open to world, as are all the course materials.

So far, I have learned that teaching an entirely online course requires far more effort than teaching in person. Maybe by a factor of 10. Partly, it is the difference between talking to a friend on the phone—you just pick up the phone and start talking—compared to writing a long letter that needs to be thought out. To this difference you add that 10,000 others will also read and depend on the letter. You get nervous about making all the pieces right. They never will be, so you never rest easy.


A Simple Invention to Help Women’s Health

BBC News reports the story of Arunachalam Muruganantham, a school dropout in rural India who invented a technology that could vastly improve reproductive health for women. The user-friendly technology relies on simple machines to produce sanitary pads at a low cost, a boon for women unwilling or unable to pay for the higher-priced sanitary pads in stores.

[Muruganantham] discovered that hardly any women in the surrounding villages used sanitary pads – fewer than one in 10. His findings were echoed by a 2011 survey by AC Nielsen, commissioned by the Indian government, which found that only 12% of women across India use sanitary pads.

Muruganantham says that in rural areas, the take-up is far less than that. He was shocked to learn that women don’t just use old rags, but other unhygienic substances such as sand, sawdust, leaves and even ash.

Women who do use cloths are often too embarrassed to dry them in the sun, which means they don’t get disinfected. Approximately 70% of all reproductive diseases in India are caused by poor menstrual hygiene – it can also affect maternal mortality.


Do Election Interventions Work?

A new working paper (abstract; PDF) by Eli Berman, Michael Callen, Clark Gibson, and James D. Long looks at the effects of election interventions in fragile states, specifically Afghanistan. The results are encouraging:

International development agencies invest heavily in institution building in fragile states, including expensive interventions to support democratic elections. Yet little evidence exists on whether elections enhance the domestic legitimacy of governments. Using the random assignment of an innovative election fraud-reducing intervention in Afghanistan, we find that decreasing electoral misconduct improves multiple survey measures of attitudes toward government, including: (1) whether Afghanistan is a democracy; (2) whether the police should resolve disputes; (3) whether members of parliament provide services; and (4) willingness to report insurgent behavior to security forces.


Why Use the Best Lumber in a House That Won’t Last?

A Freakonomics Radio listener named Kevin wrote in response to our recent episode called “Why Are Japanese Homes Disposable?” First, here’s a quick summary of that episode:

It turns out that half of all homes in Japan are demolished within 38 years — compared to 100 years in the U.S.  There is virtually no market for pre-owned homes in Japan, and 60 percent of all homes were built after 1980. In Jiro Yoshida’s estimation, while land continues to hold value, physical homes become worthless within 30 years. Other studies have shown this to happen in as little as 15 years.


Confessions of a Paid Line-Sitter

Racked interviews entrepreneur and professional line-sitter Robert Samuel.  Samuels started his line-sitting venture, Same Old Line Dudes (SOLD Inc.), as the iPhone 5 was launched:

I was an employee at AT&T, and I lost my job. I wanted to supplement my income because I used to sell iPhones, and this time I wasn’t going to be able to sell them and make a big commission check. I live a few blocks from the Apple store on 14th Street, so I said, “Let me wait in line for somebody else and make them happy.”

The guy that hired me cancelled and said he wasn’t going to use me—he was just going to get it online but that he was still going to pay me. He paid me $100 and I resold the spot and made another $100, and then I called my friends and told them to come on down, because I just made $200 standing in one spot on a weekday afternoon.


Some Evidence on Whether Money Buys Political Influence

A new paper by graduate students David Broockman and Josh Kalla tackles an eternal, oft-debated question: does money buy influence? Here’s the abstract:

Concern that lawmakers grant preferential treatment to individuals because they have contributed to political campaigns has long occupied jurists, scholars, and the public. However, the effects of campaign contributions on legislators’ behavior have proven notoriously difficult to assess. We report the first randomized field experiment on the topic. In the experiment, a political organization attempted to schedule meetings between 191 Members of Congress and their constituents who had contributed to political campaigns. However, the organization randomly assigned whether it informed legislators’ offices that individuals who would attend the meetings were contributors. Congressional offices made considerably more senior officials available for meetings when offices were informed the attendees were donors, with senior officials attending such meetings more than three times as often (p < 0.01). Influential policymakers thus appear to make themselves much more accessible to individuals because they have contributed to campaigns, even in the absence of quid pro quo arrangements. These findings have significant implications for ongoing legal and legislative debates. The hypothesis that individuals can command greater attention from influential policymakers by contributing to campaigns has been among the most contested explanations for how financial resources translate into political power. The simple but revealing experiment presented here elevates this hypothesis from extensively contested to scientifically supported.


Not-So-National Merit

Last December, thousands of high school sophomores and juniors learned the results of the 2013 Preliminary SAT (PSAT) test.  The juniors’ test scores will be used to determine whether they qualify as semifinalists for the prestigious National Merit Scholarship, which in turn makes them eligible for a host of automatic college scholarships.  (Sophomores take the test just as practice.)

The juniors will have to wait to find out for sure if they qualify until September, just before they begin submitting applications to colleges across the country.  But it is fairly straightforward to predict, based on their scores and last year’s cutoffs, whether they will qualify as semifinalists.

Many students would be surprised to learn that qualification depends not only on how high they score, but also on where they go to school.   The National Merit Scholarship Corporation (NMSC) sets different qualifying cutoffs for each state to “ensure that academically talented young people from all parts of the United States are included in this talent pool.”  They have not disclosed any specific criteria for setting the state cutoffs.


Is Uber Making the Taxi Market More Efficient?

The Economist analyzes the microeconomics of Uber’s controversial “surge” pricing model, in which users are charged significantly higher prices during high-demand times:

There is some evidence Uber’s surge pricing is improving taxi markets. The firm says drivers are sensitive to price, so that the temptation to earn more is getting more Uber drivers onto the roads at antisocial hours. In San Francisco the number of private cars for hire has shot up, Uber says. This suggests surge pricing has encouraged the number of taxis to vary with demand, with the market getting bigger during peak hours.

However, the inflexibility of Uber’s matchmaking fee, a fixed 20% of the fare, means that it may fail to optimize the matching of demand and supply. In quiet times, when fares are low, it may work well. Suppose it links lots of potential passengers willing to pay $20 for a journey with drivers happy to travel for $15. A 20% ($4) fee leaves both sides content. But now imagine a Friday night, with punters willing to pay $100 for a ride, and drivers happy to take $90: there should be scope for a deal, but Uber’s $20 fee means such journeys won’t happen.


Bring Your Think Like a Freak Questions for Levitt and Dubner

On May 12, Levitt and I will publish our third book, Think Like a Freak. We cannot wait for you to read it. Here’s how the publisher describes it:

The New York Times-bestselling Freakonomics changed the way we see the world, exposing the hidden side of just about everything. Then came Super-Freakonomics, a documentary film, an award-winning podcast, and more.

Now, with Think Like a Freak, Steven D. Levitt and Stephen J. Dubner have written their most revolutionary book yet. With their trademark blend of captivating storytelling and unconventional analysis, they take us inside their thought process and teach us all to think a bit more productively, more creatively, more rationally—to think, that is, like a Freak.

Levitt and Dubner offer a blueprint for an entirely new way to solve problems, whether your interest lies in minor lifehacks or major global reforms. As always, no topic is off-limits. They range from business to philanthropy to sports to politics, all with the goal of retraining your brain. Along the way, you’ll learn the secrets of a Japanese hot-dog-eating champion, the reason an Australian doctor swallowed a batch of dangerous bacteria, and why Nigerian e-mail scammers make a point of saying they’re from Nigeria.

You can read more about the book, check out our tour dates, and of course preorder it: the book will come in all formats including e-book, audio, large-print, and in translation around the world. We will also start up our fee-signed-bookplate-mailing program so that you can get your books autographed.

In the meantime, how about a Freakonomics Radio FAQ episode about the new book? Use the comments section below to ask us anything you want. Here’s the book’s Table of Contents to get you started …


Does the Absence of Cash Help Cut Crime?

A new working paper (abstract; ungated PDF not available) by Richard Wright, Erdal Tekin, Volkan Topalli, Chandler McClellan, Timothy Dickinson, and Richard Rosenfeld analyzes the effects of delivering welfare benefits via Electronic Benefit Transfer (EBT) instead of checks (which are easily converted to crime-fueling cash):

It has been long recognized that cash plays a critical role in fueling street crime due to its liquidity and transactional anonymity. In poor neighborhoods where street offenses are concentrated, a significant source of circulating cash stems from public assistance or welfare payments. In the 1990s, the Federal government mandated individual states to convert the delivery of their welfare benefits from paper checks to an Electronic Benefit Transfer (EBT) system, whereby recipients received and expended their funds through debit cards. In this paper, we examine whether the reduction in the circulation of cash on the streets associated with EBT implementation had an effect on crime. To address this question, we exploit the variation in the timing of the EBT implementation across Missouri counties. Our results indicate that the EBT program had a negative and significant effect on the overall crime rate as well as burglary, assault, and larceny. According to our point estimates, the overall crime rate decreased by 9.8 percent in response to the EBT program. We also find a negative effect on arrests, especially those associated with non-drug offenses. EBT implementation had no effect on rape, a crime that is unlikely to be motivated by the acquisition of cash. Interestingly, the significant drop in crime in the United States over several decades has coincided with a period of steady decline in the proportion of financial transactions involving cash. In that sense, our findings serve as a fresh contribution to the important debate surrounding the factors underpinning the great American crime decline.


Black-Market Study Notes in Korea

We recently got an e-mail from a reader we’ll call C.:

I’m a professor at an English-language liberal arts college in Seoul, South Korea, where I teach Greco-Roman classics in translation. Compared to most any American school, the academic climate here is hyper-competitive, and my Korean students are studying machines who will do whatever it takes to get good marks. If you’re familiar with the insanity of Korean education, those are my students, the ones who’ve spent years in private tutoring academies 6 days a week, doing nothing but preparing for our admissions exam.

I just learned through the grapevine that some students who took my freshman core course on Western Civ. are selling their notes, study guides, and reconstructed versions of the exam. The prices they charge current freshmen vary, depending upon the grade the seller received from me. Students who did very well (A or A+) can charge $200 for their notes; students who received Bs can ask $120 to $150. Students with a B- or lower can’t find buyers.


Think Like a Freak: Our New Book Out on May 13

Good news (for us at least): our new book is done! It’s called Think Like a Freak. It will be published on May 13; but you can pre-order now on Amazon.com, B&N.com, iTunes, or any of your finer online bookshops.

Think Like a Freak is, like our two earlier books, a blend of storytelling and data. But Think has a slightly different mission than Freakonomics and SuperFreakonomics. Here’s how we explain it in the first chapter:

The first two books were rarely prescriptive. For the most part, we simply used data to tell stories we found interesting, shining a light on parts of society that often lay in shadow. This book steps out of the shadows and tries to offer some advice that may occasionally be useful, whether you are interested in minor lifehacks or major global reforms.

Although we tell a million stories in Think,  the emphasis is usually on problem-solving:

It strikes us that in recent years, the idea has arisen that there is a “right” way to think about solving a given problem and of course a “wrong” way too. This inevitably leads to a lot of shouting—and, sadly, a lot of unsolved problems. Can this situation be improved upon? We hope so. We’d like to bury the idea that there’s a right way and a wrong way, a smart way and a foolish way, a red way and a blue way. The modern world demands that we all think a bit more productively, more creatively, more rationally; that we think from a different angle, with a different set of muscles, with a different set of expectations; that we think with neither fear nor favor, with neither blind optimism nor sour skepticism. That we think like—ahem—a Freak.


Why Does Airport Pickup Cost More?

We are arranging a car to take us from our flat to Heathrow Airport early Saturday morning, then return us on Monday evening.  The price going to the airport is ₤28, the price returning is ₤38.  Why the difference?

One possibility is cost-based price discrimination: the driver may have to wait at Heathrow, since the plane and retrieving our baggage may be delayed.  Another is that the prices are set to match the differential set by metered taxis to reflect waiting time for fares at Heathrow (although I would think that competition among car services would eliminate that differential).  I don’t see how this differential could arise from demand-based price discrimination; and neither of the other explanations seems very satisfying.

(HT: DA)


A Good Instrument Is Hard to Find

Phoebe Clarke recently posted a Deadspin article about an article that we just published in The Journal of Socio-Economics. The article, “The Chastain Effect: Using Title IX to Measure the Causal Effect of Participating in High School Sports on Adult Women’s Social Lives,” adopts an ingenious methodology pioneered by Betsey Stevenson (whose research is frequently featured here) in her 2010 study “Beyond the Classroom: Using Title IX to Measure the Return to High School Sports.” Stevenson estimates the effects of participating in high school sports on women’s economic lives, and finds that sports participation leads women to attain higher levels of education and earn more. I apply the same methodology to social outcomes, and find that sports participation causes women to be less religious, more likely to have children, and, if they do have children, more likely to be single mothers.


Dalton Conley Answers Your “Parentology” Questions

Last week, we solicited your questions for Dalton Conley, NYU sociologist, father, and author of Parentology: Everything You Wanted to Know about the Science of Raising Children but Were Too Exhausted to Ask. Below you will find his very interesting answers, including his thoughts whether you should stay home with your kids, how divorce affects child outcomes, and the old question of nature vs. nurture. Thanks to Dalton — and to all of you for your excellent questions.

Q. Why should we consider your limited sample size “study” to be anything more than anecdotal? How do you justify it as “science” and not simply “story telling”? –Matti

A. As Dubner and Levitt of Freakonomics did in their fabulous book, my accounts of my “do(n’t) try this at home” parenting interventions—bribing my kids to do math, not teaching them to decode words on the page, exposing them to sewage to build up their immune systems and so forth—are meant to be a way in to talk about the existing research that is based on large samples, randomized controlled trials and cutting-edge econometric analysis.  But would you rather read pages about whether or not the exclusion restriction is violated in a particular instrumental variable model of divorce? Or relegate that to endnotes so that you can hear about how my crazy family lived—like the Isaac Bashevis Singer tale—with a house full of animals to prevent childhood allergies?  Ok, maybe don’t answer that.


Let Us Know What Kind of Free Stuff You Really Want

When we ask people to contribute to our public-radio Freakonomics podcast, our sponsor station WNYC offers some of the standard public-radio gifts: a Freakonomics t-shirt, a coffee mug, copies of our books, etc. I am curious what sort of gifts people really want. The radio station tells us that people love love love tote bags, but as someone who almost never carries a tote bag, I am skeptical. But I am also happy to be proven wrong. So please let us know via the poll below, and also write in answers in the comments. Thanks.


What is “Parentology”? Bring Your Questions for Dalton Conley

Last year, we talked to NYU sociologist Dalton Conley and his two children, E and Yo, on our podcast “How Much Does Your Name Matter?” Their names — E Harper Nora Jeremijenko-Conley and Yo Xing Heyno Augustus Eisner Alexander Weiser Knuckles Jeremijenko-Conley — are a bit of an experiment:

CONLEY: Of course it’s hard to separate out cause and effect here until Kim Jong-Un allows me to randomly assign all the names of the North Korean kids…but my gut tells me that it does affect who you are and how you behave and probably makes you more creative to have an unusual name.

Conley’s approach to naming his kids is certainly interesting (and highly unusual), to say the least. As it turns out, Conley has the same approach to parenting. He chronicles his unorthodox, research-inspired parenting in his new book Parentology: Everything You Wanted to Know about the Science of Raising Children but Were Too Exhausted to Ask. The book is out today, and Conley has agreed to answer blog reader questions about the book, so ask away in the comments section below. As always, we’ll post his answers in short course.


The Problem of Dominated Funds

This is the second in a series of posts about the problem of excess fees charged to defined contribution retirement plans.

Retirement regulations have largely been successful in giving worker/participant defined contribution plans the opportunity to diversify.  Most plans nowadays give participants a sufficient variety of investment options that it is possible to allocate investments so as to diversify away most idiosyncratic risks.

However, the 1974 Employment Retirement Income Security Act’s (ERISA) emphasis on diversification has diverted attention from the problem of excess costs.  Courts evaluating whether plan fiduciaries have acted prudently have tended to just ask whether the plan offered a sufficient number of reasonably-priced investment opportunities.  For example, in Hecker vs. Deer & Co. (7th Cir. 2009), the 7th Circuit found it was “untenable to suggest that all of the more than 2500 publicly available investment options had excessive expense ratios.”


The Economic Value of 3D Printing?

On a visit to the London Science Museum, my oldest grandson explained to me how 3D printing works.  I expressed doubt about its economic value, but he pointed out this sign.  “Aha,” I said, “here is a clear-cut case of a technological change that should reduce long-run average cost (by saving on materials).”

And despite the last sentence of the picture, this saving will eventually be passed onto consumers in the form of lower ticket prices, but probably not fully in the oligopolistic aircraft manufacturing industry.

(HT: JCH)


Making It

In 2009, I published a post on this blog about Sarah Dooley, which ended with the words:

I predict she is going to make it big. I’m not sure how, but remember you heard it here first.

A couple of months later, I received a letter out of the blue from a legit movie producer who said he was writing to thank me for that post because from it he learned how talented Sarah is.  He wrote that he had just signed a contract with her to develop a screenplay.

Fast forward to the present, and while I can’t find any movies made with Sarah’s scripts, I was happy to hear this NPR interview with her about an album she just released.  The album is called “Stupid Things.”  My favorite song, “Gym Looks Nice,” is a school dance tone poem that is characteristically moving.  My daughter tells me that at one point, it made it into the top twenty downloads on iTunes.  Sarah’s also released a music video of her song “Peonies.”


Pricing at the British Library

At the British Library, the special exhibition about Georgian England has a concession (old folks) price of ₤7, but also a listed concession (gift) price of ₤8. With the latter, one gets a receipt and can deduct the ₤8 from one’s income at tax time. If one is in the 20 percent bracket (taxable income from almost nothing up to ₤32,000), the net admission price is ₤6.40. So the incidence of the subsidy is typically shared nicely by the library and the taxpayer. But for the highest-income visitors — tax rate of 40 percent — the overwhelming share of the benefit goes to the taxpayer. I’ve never seen this double-pricing scheme made so explicit — and the sharing of the gains made so clear — in the U.S.


Democracy: Should We Bother?

What could be less controversial than the principle that the public should be consulted about transportation policy? In future posts, I’m going to write about why puppy dogs are despicable and why we should all root for the Miami Heat, but for today I’m going to question this seemingly unquestionable proposition.

There is good reason that one of modern transportation planning’s most fundamental precepts is that the public should be consulted on policies large and small, from constructing a new subway line to changing a humble bus schedule. This is the product of very real abuses, particularly during the creation of the Interstate Highway System. At that time, government had virtual carte blanche to displace residents and bulldoze neighborhoods. For example, for Los Angeles’s Harbor Freeway in the late 1940s, the condemnation resolution for the right-of-way was approved by the court the day after it was filed by the state. The following day, every piece of property along the route was posted with a fifteen day notice to vacate. And less than three weeks after the filing of the condemnation resolution, the Division of Highways began clearing the property.


Does Breastfeeding Reduce Childhood Disability?

A new (gated) NBER paper looks at the relationship between breastfeeding and childhood disability.  The author, George Wehby, finds that a longer duration of breastfeeding is associated with a slightly lower risk of child disability:

Little is known about whether breastfeeding may prevent disabilities throughout childhood. We evaluate the effects of breastfeeding on child disability using data from the National Survey of Family Growth merged to the National Health Interview Survey for a large nationally representative sample of children aged 1 to 18 years from the U.S. including over 3,000 siblings who are discordant on breastfeeding status/duration. We focus on a mother fixed effect model that compares siblings in order to account for family-level unobservable confounders and employ multiple specifications including a dynamic model that accounts for disability status of the prior child. Breastfeeding the child for a longer duration is associated with a lower risk of child disability, by about 0.2 percentage-points per month of breastfeeding. This effect is only observed on the intensive margin among breastfed children, as any breastfeeding has no effect on the extensive margin. We conclude that very short breastfeeding durations are unlikely to have an effect on reducing disability risk.


A Herd-Mentality Nudge on the Singapore Subway

Our “Riding the Herd Mentality” podcast argued that one surprisingly effective way to encourage pro-social behavior is to simply tell people that everybody else is already doing it.

A reader named Freek Rijna — “Jep, that’s my real name and it’s typically Dutch. :-)” — sends in this example from the Singapore subway. “Thought you might enjoy it,” Freek writes. “Not sure about the penguins though …”

I see Freek’s point. Also, I might have to stop for a minute to think whether “alighting” means getting off or getting on …


The Relationship Between Hearing and Memory

We’ve blogged before about how easy it is to create false memories. A new psychology study explores which of our senses are generally more influential in imprinting memory. “As it turns out, there is merit to the Chinese proverb ‘I hear, and I forget; I see, and I remember,” says James Bigelow, a graduate student at the University of Iowa who is lead author of the study.

From Pacific Standard:

The study consisted of two experiments that focused on short-term memory. Participants were exposed to different pictures, sounds, and objects to touch (shielded from view), and then asked to distinguish each thing from a similar item or identify it among a larger group. Sometimes participants’ memories were tested after only a matter of seconds, but in other instances the study stretched the time before recall to a day or even a week. While the accuracy of the participants’ memories declined across the board as time went on, the accuracy of their auditory recall plummeted more rapidly than that of the the other two senses.


If You Care About Costs . . .

This is the first in a series of posts about the problem of excess fees charged to defined contribution retirement plans, a subject I’ve been researching with Quinn Curtis.  Our findings about the pervasiveness of excess fees spurred me to reassess my own retirement investments.  I was embarrassed to find that, among other things, my old Stanford University 401k was invested in “CREF Stock Account,” which uses a combination of “active management, enhanced indexing and pure indexing” and charges 49 basis points (.49%) as its “Estimated Expense Charge.”  Now 49 basis points is not an outrageously high fee, but it is substantially higher than the fees charged by a low-cost index. 

So I called TIAA-CREF and asked for help in rolling over my Stanford account to a Fidelity IRA.  The TIAA CREF rollover specialist asked why I wanted a rollover, we had the follow brief exchange:


How Does Pollution Affect Productivity?

A new NBER working paper (abstract; PDF) by Tom Chang, Joshua Graff Zivin, Tal Gross, and Matthew Neidell looks at how outdoor air pollution affects the productivity of indoor workers. They studied the effect of PM2.5, “a harmful pollutant that easily penetrates indoor settings,” on employees at a pear-packing factory in California, and the potential cost savings of eliminating such pollution:

We find that an increase in PM2.5 outdoors leads to a statistically and economically significant decrease in packing speeds inside the factory, with effects arising at levels well below current air quality standards. In contrast, we find little effect of PM2.5 on hours worked or the decision to work, and little effect of pollutants that do not travel indoors, such as ozone. This effect of outdoor pollution on the productivity of indoor workers suggests a thus far overlooked consequence of pollution. Back-of-the-envelope calculations suggest that nationwide reductions in PM2.5 from 1999 to 2008 generated $19.5 billion in labor cost savings, which is roughly one-third of the total welfare benefits associated with this change.