Inequality, Survival to Adulthood, and the Growth Drag of Pollution

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Abstract

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.
Original languageEnglish
Pages (from-to)59-79
Number of pages21
JournalOxford Economic Papers
Volume72
Issue number1
Early online date23 May 2019
DOIs
Publication statusPublished - 31 Jan 2020

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