We theoretically investigate the interrelationship between economic inequality and the exposure to pollutants during the course of economic development. Environmental pollution adversely aﬀects children’s probability to survive to adulthood, reduces thus parental expenditures on child quality and increases the number of births necessary to achieve a desired family size. Children’s exposure to environmental pollution is determined by economic inequality because wealthier households live in cleaner areas which shapes then diﬀerences in the level of human capital per child. This is the key mechanism through which environmental conditions impose a growth drag on the economy. Our theory provides a candidate explanation for: (i) The hump-shaped evolution of child mortality ratios between cleaner and more polluted areas during the course of economic development, and (ii) the observed positive correlation between inequality and the concentration of pollutants at the local level.