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A causal link between air pollution and lower earnings

A new study reveals how inequality is something we breathe.

Emissions from a coal-fired power plant silhouetted against the setting sun in Kansas City, Mo., on Feb. 1, 2021.Charlie Riedel/Associated Press

Air pollution kills up to 10 million people a year. That’s almost twice the total global death toll from COVID and around 20 times the combined annual body count from wars, homicides, and terrorism. By inflaming the body’s immune system, among other things, air pollution raises the risk of stroke, heart disease, lung cancer, diabetes, and respiratory diseases like asthma. Babies who live along crowded highways are more likely to be born prematurely and underweight. Teenagers exposed to dirty air are at greater risk of depression. Long-term exposure can lead to Parkinson’s or macular degeneration.

Poor air quality has been linked to substantial declines in test scores, as well as to Alzheimer’s and dementia. When exposed to higher levels of pollution, chess players play less strategically in high-stakes matches, baseball umpires make more mistakes, and politicians use less complex speech. On days with worse air quality, workers at Chinese call centers are less productive. So are brokerage traders in Germany and pear packers in Northern California.


There is no dearth of evidence, in other words, that air pollution poses a significant threat to human health and cognition. Now a new study reveals that pollution is not merely a public health scourge but also a key driver of economic and racial inequality.

The study’s authors, economists at the University of Virginia and at the US Census Bureau, analyzed more than three decades of satellite data on air quality and administrative data from the Census Bureau and the Internal Revenue Service. They found a striking correlation between air pollution and economic opportunity. Early-life exposure to “fine particulate matter” — harmful microscopic air pollutants — is one of the top five predictors of economic mobility in the United States.


To determine whether this correlation reflects an underlying causal relationship, the economists studied the effects of a series of 1990 amendments to the Clean Air Act that strengthened air quality standards. These updates affected some counties but not others, so the economists were able to isolate the effects of air pollution on economic outcomes. Their results are staggering. A small reduction in prenatal exposure to particulate matter — just one microgram per cubic meter, or 1/12th of the acceptable level currently set by the Environmental Protection Agency — is associated with an increase of more than $1,100 in annual earnings around age 30.

What’s more, disparities in prenatal exposure may account for up to 26 percent of the Black-white earnings gap. This is a disturbing finding though not an altogether surprising one: ZIP codes with larger Black populations tend to be more polluted, in part because smokestacks and power plants were often built near predominantly Black communities. Overall, poor people and people of color are more likely to die from exposure to polluted air than other groups, making clean air not only a health and economic priority but one that could make a real dent in racial injustice.

The good news is that we already know how to clean the air — above all, by phasing out gasoline- and diesel-burning vehicles, replacing coal plants with clean energy, and raising air quality regulatory standards. The Clean Air Act has cut the combined emissions of six common pollutants by 78 percent since 1970. In 2020 alone, according to the EPA, the 1990 Clean Air Act amendments prevented over 230,000 premature deaths. And the programs established by these amendments deliver annual economic benefits of around $2 trillion — some 30 times the cost of complying with the regulations.


The Biden administration appears to understand the importance of continued action. A scientific advisory panel at the EPA has backed tighter soot standards, and the Inflation Reduction Act includes several provisions designed to reduce air pollution. But if federal action stalls, local governments, the private sector, and civil society can still make progress.

Among other things, decision-makers at all levels could focus on improving indoor air quality. After all, air pollution can easily seep indoors, where many people spend more than 90 percent of their time. Yet schools and offices tend to be under-ventilated, and individuals remain inadequately informed about the importance of clean indoor air. The Inflation Reduction Act and the American Rescue Plan include funding for ventilation upgrades in schools and provide pandemic recovery aid to state and local governments, including money for ventilation and filtration (cleaner indoor air also helps reduce the spread of COVID and other respiratory diseases). But private companies can also voluntarily upgrade heating, ventilation, and air conditioning systems and install high-quality air filters in workplaces.


The potential gains are enormous. After school buses in Georgia were retrofitted with cleaner engines, reducing students’ exposure to diesel emissions, students performed significantly better on their exams. Something similar happened in Los Angeles when schools installed air filters. In another study, workers’ cognitive performance improved significantly when they worked in office environments with better ventilation and lower concentrations of carbon dioxide and volatile organic compounds, chemicals found in thousands of products including paint, building materials, and office equipment.

There is, of course, no silver bullet that will improve human health, expand economic opportunity, or shrink the racial wealth gap. But getting tougher on air pollution is a relatively simple way to make progress on all three for the price of one.

Nikita Lalwani is a lawyer and freelance journalist based in Washington, D.C. Sam Winter-Levy is a PhD candidate in political science at Princeton University.