When Particulate Matter Strikes Cities. Social Disparities and Health Costs of Air Pollution

We investigate unequal effects of daily particulate matter (PM) concentrations on Italian hospitalizations by exploiting daily episodes of public transportation strikes as an instrumental variable for pollution exposure. We show that hospitalizations resulting from higher pollution are not only more likely to occur (extensive margin), but are also more complex to deal with (intensive margin). This penalty is larger for the young, the elderly, the less educated and migrants from low income countries. In order to appreciate the heterogeneity of our results, we show how municipalities with different age structures and PM exposure face similar hospitalization costs.