Adam Isen, Maya Rossin-Slater, Reed Walker, 19 February 2014

There is growing evidence that adverse infant health can have lasting effects on human capital formation and economic outcomes in adulthood. Among others, the poor environmental conditions have been linked to increased infant mortality and poor health. This column looks at the long-run effects of early-life pollution exposure. Using the Clean Air Act enacted in 1970 as a policy experiment, the study finds an association between reduced pollution and labour-market outcomes 30 years later. Reduced-pollution increases labour-force participation rate for affected individuals, which translates into a 1% increase in annual earning for an average individual in a cohort.

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