The Grandkids Aren't Alright: The Intergenerational Effects of Pollution Exposure, with John Voorheis (U.S. Census)

Environmental conditions shape human capital at birth and have been shown to have persistent effects, affecting later-life outcomes. But do these effects shape the economic opportunities of future generations? Here we provide early evidence on the intergenerational consequences of early-life pollution exposure. Using newly linked survey and administrative data, providing more than 180 million parent-child links, we show that reductions in particulate matter, arising from the 1970 Clean Air Act, have intergenerational effects — the children of those directly affected are more likely to attend college. Greater parental resources and investments, rather than biological channels, appear to drive this effect. Back-of-the-envelope calculation suggest that the combined first- and second-generation earnings benefits are comparable in magnitude to the monetized benefits associated with reduced infant mortality — the dominant benefit in benefit-cost analyses. Our results suggest that within-generation estimates of marginal damages substantially underestimate the total welfare effects of improving environmental quality and point to the empirical relevance of environmental quality as a contributor to economic opportunity and upward mobility.

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