Friday 15 May 2020 13:00 - 14:30

ONLINE

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About this event

Environmental conditions during gestation shape human capital at birth and have also been shown to have persistent effects on later-life economic outcomes. However, little is known about whether prenatal environmental exposure affects the economic opportunities of future generations. Using newly linked survey and administrative data, providing more than 180 million parent-child links, we provide early evidence on the intergenerational consequences of prenatal pollution exposure. We estimate that the children of those that experienced reductions in prenatal particulate matter exposure, arising from the 1970 Clean Air Act, are more likely to attend college. Greater parental resources and investment, rather than biological channels, drive this effect. Back-of-theenvelope calculations 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 cost-benefit 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 potential role that investments in environmental quality could play in contributing towards economic opportunity and upward mobility.

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Directions

Urban and Regional Economics Seminars are part of the CEP's Urban and spatial programme.