Long-Term Consequences of Air Pollution

The paper presented in this Mannheim Applied Seminar examines the long-term impacts of early childhood exposure to pollution by leveraging the sharp decrease in imported sulfur dioxide – the primary driver of acid rain – in Norway following the enactment of the Convention on Long-Range Transboundary Air Pollution. The authors compare cohorts born in municipalities with significant reductions in pollution exposure before and after the decrease, to cohorts born in municipalities with minimal initial exposure. Using a difference-in-differences design, they find that higher pollution levels are associated with lower academic performance and poorer health outcomes. To further understand the early-life human capital production function, the authors augment the baseline model with a movers’ design to explore asymmetrical moves, which create sharp changes (both in amount and direction) in exposure across ages. Their findings underscore the critical role of early exposure, independent of its duration.