Abstract

In this project, we analyze the long-term effects of early childhood exposure to air pollution on individual employment biographies using administrative data from the Federal Employment Services. To identify the effects we are looking for, we use regionally heterogeneous changes in air pollution caused by the implementation of the Large Combustion Plant Act of 1983. We do so by comparing birth cohorts in counties in West Germany before and after the large improvement in air quality compared to the same cohorts born in counties that were already less exposed to strong air pollution from large combustion plants due to their geographic location before the measure. In particular, the project examines the relationship between pollution exposure in the year of birth and subsequent labor market effects, especially with respect to skill levels, labor force participation, employment stability, and wages.