Profiting From Less Pollution

Cleaner air correlates with greater cashflow:

new paper suggests [one] measure to curb pollution that may have had beneficial long-term economic impacts for individuals. The paper’s authors, Adam Isen, Maya Rossin-Slater and Reed Walker, compared the adult labour-market outcomes of those born in counties in America where air pollution decreased as the result of the 1970 Clean Air Act to those born in areas where pollution did not fall in this period. They found that those who were born in counties that were forced to cut air pollution as a result of the legislation earned more by their thirties than they would have otherwise: gaining approximately $4,300 each in extra income over their lives.

At first, this result may seem a little strange. As dirty industries closed in many affected areas as a result of the Clean Air Act, one would expect incomes to fall as the result of increased unemployment. Yet the authors of the paper found the opposite: the long-term benefits of better childhood health on adult incomes outweighed the other negative immediate economic effects that may have resulted from the legislation.