February 2020

IZA DP No. 12965: Can Pollution Cause Poverty? The Effects of Pollution on Educational, Health and Economic Outcomes

Although industrial plants, known as Toxic Release Inventory (TRI) sites, exist in every major city of the United States releasing billions of pounds of toxic substances annually, there is little evidence about how these pollutants might harm child development and children's long run outcomes. Using the detailed geocoded data that follows national representative cohorts of children born to the NLSY respondents over time with detailed information on families, locations, health, disability and labor market outcomes, I compare siblings who were gestating before versus after a TRI site opened or closed within one mile of their home. In other words, I compare siblings in the same family whose family does not move between births where one or more child was exposed to TRI pollution during gestation and other siblings were not exposed because the plant opened or closed in between the conceptions of different children in the same family. I find that children who were exposed prenatally to TRI pollution have lower wages, are more likely to be in poverty as adults, have fewer years of completed education, are less likely to graduate high school, and are more likely to have a disability.