Study on the air pollution and economic growth in the work resumption of the COVID-19

The early 2020 COVID-19 outbreak in many cities in China resulted in significant negative economic impacts. Consequently, the resumption of work post-pandemic may have led to a more aggressive recovery of economic growth (i.e., GDP) than usual, potentially exacerbating pollution levels. This study investigated the environmental (air) pollution resulting from the post-pandemic work resumption in 2020, and its effects on economic growth. The study found that, firstly, the Air Quality Index (AQI) in 2020 had a positive and significant impact on the annual growth rate of urban GDP, confirming that the resumption of work is “too” positive. Secondly, considering the endogeneity caused by the potential impact of reverse causality and missing variables, this study uses the confirmed cases of COVID-19 in cities of China as instrumental variables for further testing, with the new estimates reinforcing the initial findings. Thirdly, a decrease in newly confirmed cases of COVID-19 eads to an increase in GDP, as the reduced cases suggest easing pandemic conditions, allowing for work resumption and GDP growth. Finally, urban district population and urban population have different effects on the annual growth rate of GDP. This study found that air pollution has a more effective impact on GDP in provincial capital cities, urban populated areas, and areas with high temperatures. Research shows that in these locations, greater attention should be paid to air pollution and efforts should be intensified for better air quality management.